I like the Conan d20 idea for Favoured Class, but doesn't it turn on its head the effect of Favoured Class has?
What I mean is: in the rules as written, Favoured Class encourages a PC to dabble in that bclass, gaining a level or two without messing up advancement in another class. The Conan d20 approach instead encourages them to pursue that class to the exclusion of others.
Regarding the abolition of a Multi-Class penalty, I would suggest granting Humans and Half-Elves an extra Skill Point each level, to represent their versatility.