Yes, your exp is shared with the group; but it's not as though the whole group has a 68% exp penalty. The penalty is shared or divided among the group. You should read this brief wiki snippet because it will truly answer all questions:
http://wiki.project1999.com/Experien...perience_Works
Always make sure to check the wiki and forums for information. Hopefully no one on the forums is going around saying exp penalties are not shared, because that's wrong.
Class exp penalties are removed during Velious, which Blue is already in; so perhaps someone said there aren't class exp penalties because they were referring to Blue. Racial exp penalties remain.