Character advancement was a bit more tricky but after much brainstorming at Ye Olde Inn and elsewhere I came up with the Skill Cards system (thanks Sjeng and Patroclus).
The Skill Cards enable a Hero to possess powerful abilities without
breaking the game balance. He can flaunt his skill at just the right
moment; and as he becomes a more experienced adventurer he can do this
All of the Skill Cards can be found at the back of the rulebook, or included with the Hero Creation pdf, and also as a standalone pdf file ready for printing. The former two options also include the table for selecting the Skill Cards based on race and class. Finally, if you don't like the Skill Card idea - the game is in no way ruined by excluding them.
See the DOWNLOADS page of this blog to get these pdf files. Here is an example Skill Card (front and back):