AFIK the gnoll is a completely normal 3rd level character. Assuming the skills with which he started were something on the level a 2nd level character would have, then he get just normal skill points, not the x4 first level bonus, for his next level. If you started him as just a gnoll with 2 HD, then think of him as having 2 levels of monster (which is pretty much like 2 levels of warrior), and now is adding a level of ranger.
On a related note, I agree they made it quite confusing. The gnoll was a easy example, but others are not. If you look in the DMG, in the NPC tables, it has challenge rating adjustments, which don't figure in to player characters, and may or may not be equal to the ECL. The way the book states it, the ECL is used for determining what character level the moster is equal to, but the mosters HD are used to determine his actual class level. Every group I have played in does not run this way, but instead uses ECL both for what character level he is considered equal to, and what class level he is treated as having.
For an example of this confusing system, take the minotaur. I don't have a DMG handy, so the exact numbers may not be correct. Mr. minotaur has 6HD, and an ECL of +8 (I guess because of the high str). By the book, this means that the 6HD minotaur is appropriate to adventure with a party of 8th level characters. However, he is treated as a 6th level character with regard to subsequent advancement and stuff. As I mentioned earlier, everyone I know would just look at ECL +8 and say he is 8th level, but book lists this slightly more complex sysetm (which IMHO add a lot of complexity for a tiny bit of balance).
