If they can only gain one level at a time that defeats the purpose of me putting in a sleep red dragon that is "young, stupid, and cocky, and will not use its abilities or flee" (tm).
If I am going throw such a "difficult" encounter at my PCs they "deserve" to go up 2-3 levels.
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Seriously, if you PCs are gaining multiples levels then they are probably getting too many xps for "easy" encounters, or you are not awarding xps to them in a timely manner.
I generally award xps after every encounter (in case someone does level), or at a slow spot durring the game. At the latest players get xps at the end of the session. My players usually advanced at the rate of 1 level per 2-3 session (witch is about 1 level per 13 encounters).