This is *precisely* the way I handled it from the beginning IMC... XP is awarded "on the fly" (i.e., at the end of each encounter) and when you level, you received Hp, Save, BAB, and spell slot increases (NOT spells known or spells in spellbook). Skills, Feats, Spells Known/in book, and all other stuff was done at the end of the adventure in "off-camera" time (unless, of course, there was an in-game explanation... one wizard bought a fireball scroll at 4th level and packed it around with him so he could scribe it into his spellbook mid-adventure when he hit level 5 - he had the relevant spell on-hand, so it was okay). I figured that skills and Feats and such take longer to learn (so even if a party member could teach you, you couldn't up it unless enough off-camera time elapsed), but "innate" class qualities (BAB, Spell Slots, hp) etc. simply manifest when the character becomes experienced enough. It also gave justification for training costs to relieve the PCs of some of their money... ;-)