Class penalties are removed a couple months into Velious.
Penalties are as such: Paladin/Shadow Knight/Ranger/Bard 40%, Monk 20%, Enchanter/Necromancer/Wizard/Magician 10%. Warrior has a 10% bonus, Rogue has a 9.5% bonus. These modifiers stack with the racial modifiers (10+ for Barbarian, 15 for Ogre, 20 for Troll and Iksar) in a multiplicative sense, so a Troll Shadow Knight has a total 68% penalty, and an Iksar Monk has a 44% penalty.
The other part that people commonly forget is that experience is divided across the group based on the various players' experience totals, not class or level. Hence inviting a lower-level Ranger or Paladin will "suck up" less experience from the rest of his group than a higher-level Warrior might. In practice this is too complicated for the average player to bother learning, so hybrids in general (and Rangers especially) simply end up discriminated against while the other factors are largely ignored.
Danth
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