I use the auto-leveling guidelines from the DMG, and don't bother with tracking individual xp awards. The whole party levels together.
So how can I incorporate non-xp rewards for completing minor quests? I mean besides story elements like the king's favor or a blacksmith's finest sword.
Action points?
Personnally I have several factions in my setting : clergy of different religions, thief guilds, etc.
Minor quest usually give the party bonus/malus for any test involving the given organisation. I keep track of those bonus and use them to alter skill tests and give a certain flavour to the dscriptions of encounters involving the NPC.
I also use minot quest to "pop up/spice up" minor storyline elements. For example, my PCs had a little "sidetrack encounter" with an innkeeper and gave a letter from him to a former lover in another town. They have, as a result, a bonus in relation with those two people and the description of any event involving those two people with get longer, just a little bit, just enough to make the players raise an eyebrow. The trick is that I do it lightly... The description is just a little spiced up, the NPC have a name, and a nickname, and gets described a little more than seems useful.
This was a minor quest, in my mind, because the plot will have them come back there... Later, much later or not so later. I consider I have, by this minor quest, planted a seed that will grow...
I also give them certain bonus to skill tests on certain occasions. For example, it was crucial that the PC get the trust of the Royal Guards. I depicted them as gritty veterans. I prepared some scenes to induce the PCs to mix up with them building a relationship. My PC did well with these scenes, and one even went further and added a scene on his own. It allowed the group to succeed more quickly in this minor quest. The resusts were :
1. The minor quest XP were given to the group
2. Each and every PC in the group has a +1 when dealing with the Royal Guards
3. The imaginative player got a +2 when playing the game of cards he depicted in the scene (+2 to insight, thievery depended on the way he wants to play...)
This way all PCs get the same amount of XP, while the one that is trying to go "beyond the call of duty" gets a special reward that is so narrow in scope that it doesn't unbalance the party. However, the player is happy to have this little custom bonus.
I am also a fan of evolving magic item. I gave fairly early in the campaign some "named" magic items : the wand of Lyrmeth, the Girisois' shield, the Thalies dagger, etc. When my PC achieve some minor quest, I give the magic item another power/bonus, etc. Jus a little one that will be related to the plot of course.
To keep track of this I have a notebook where I write down all that. I will get this in the MASTERPLAN encyclopedia, as soon as I can gather som time to do it.
Personnally, I also use quests to give XP to the party, so that they feel that the plot is important and unfolding...
Usually, when they achieve a quest, I somehow stop the action to give them an hint (in character, through a recollection, a NPC, etc.) that the plot has reached a crucial point. It can take the simple form of a name given to what seemed an unimportant NPC.
Hope this helps.