I've been thinking about this one in the back of my head for a couple days now. At first I was trying to think of this as a way to even out split-level parties, but it couldn't come together. (I've got a game I'm going to start where I want everyone to start at level one (plus survivability tweaks), no swapping in higher-level guys when replacing a character. This doesn't solve the problem, but does pose some interesting questions.)
Also as a note, my games use a level-by-level progression sheet that tracks per-level gains in saves, class features, and HD rolls. (It also handily has the XP required per-level.)
As I understand it, this is somewhat similar to the older multiclassing rules, mainly with respect to the XP splitting.
Okay, so here goes:
Single-class leveling is unchanged. If you never multiclass and play a base race, you will have no changes. First class goes by the standard XP chart (current level x1000 xp over).
XP for leveling is treated like cost, rather than breaking limits of total. (I'm thinking of a more XP-fluid game in general.. Stuff like magic items are powered by small continuous XP burning, making use of the XP-as-a-river idea to a fuller extent.)
If you start as a level 5 rogue (for instance) and decide to take a level of druid, you start up a second progression sheet as that class, costing that new class's level x 1000 in XP, so 1000xp (basically taking the regular chart and shifting it one level). But instead of gaining a whole new level, new hit dice, increase in saves, and so forth, you gain that one druid level as a gestalt better-of comparison. The druid's D8 outweighs the rogue's d6 for first level, so that number is replaced. Skills aren't better, but you could retrain some points over as desired. You also gain druid's first level class features, the animal companion and spells. (Saves and BAB are probably handled by summing the per-class totals and taking better-of, but I'm thinking of switching how those function for my game anyhow. Not really important, stick with base for comparison but consider problems brought up there won't hold much weight for me since I'm changing things.)
XP is gained as the highest level total, as are any total-level benefits like feats and ability score increases, though you have retraining options. (either open retraining, or maybe just switching them when you hit a feat-level in any class.)
PrCs are either dropped entirely or drastically limited, mainly with multiclass-facilitating PrCs gone. If a PrC directly extends a class's features, it can sit in that class's gestalt track, replacing the other features, but I'd largely prefer to abandon PrCs.
The idea here is that your character XP total, rather than your actual levels, determines your effective power level. Hopefully there's some parity, (I've gotta do XP comparisons yet, I'll be in spreadsheet heaven this saturday) but I'd like some input on the base idea, as it stands.