While I've known of tables that used that particular rule, most tables I know of either didn't use it or simply applied a multiplier of 1 (E) by default- which is the same thing. Basically, the levelling and training rules were the regular combat rules, the grading was the "Weapon v. AC adjustment".
By the way- this was mentioned in the PHB. Again, the PHB in 1e was not canonical for some areas of the gaming; it was assumed that the players would have more limited information and that the DMG would fill in the rest. But it's on page 106.
Finally, clerics' major aims are to use their spell abilities to aid during any given encounter, fighters aim to engage in combat, magic-users aim to cast spells, thieves aim to make gain by stealth, and monks aim to use their unusual talents to come to successful ends. If characters gain treasure by pursuit of their major aims, then they are generally entitled to a full share of earned experience points awarded by the DM.
I think Gygax changed his mind between the PHB and the DMG - instead of doing it as a share of XP, he moved it to a multiplier of weeks (so it added time and money). By the way, the PHB also mentions (although doesn't detail) the fact that you don't get XP until you return from adventuring to a base of operations.