What are some of the differences between using point-based character advancement systems (like Mutants and Masterminds, or Hero System) and class/level-based advancement systems (like in DnD or Warhammer Fantasy Roleplay)?
What kinds of games and players favor one over the other?
Really, there are more than two kinds.
Open Fully point based, à la Hero System or GURPS: anything you can justify to the GM, you can (eventually) get. The problem is that such systems often overwhelm players and GM's with options, and often, some options may be mechanically useful but out of character, and taken anyway for the mechanical benefits alone. A few use multiple pools of points in character generation, such as EABA uses, but not in play.
Restricted points systems, Like WFRP, or Dark Heresy and Rogue Trader, or the old GW Judge Dredd, leave lots of choice to the player still, but focus it by limiting the choices. They usually allow much more expensive options for outside skills. Your choice of class career focuses the choices to manageable ones; it also often puts some that might be better fits for character development into higher expense, or even off limits. Some implementations attempt to balance, others don't. WFRP1, for example, had some careers with 5 advances, and some with more than 20, at 100XP per advance. Many have randomized generations
Class & level based skills like Palladium's games, or The Arcanum. Your class determines your skill list; your character level determines what those skills are rated at. Most allow some elective skills; some, by spending experience (like the Arcanum), others at specific levels. Limited choices, characters often feel carbon copy. Fast, though, if using character sheets with the skill list preprinted save for levels.
Class based skill points per level as in D20, Alternity, Rolemaster. Your class determines what skills cost what, but generally, all skills are available to all classes, save a few iconic ones. D20 adds a second category, Feats, which are also restricted, but less so. These systems allow quite a lot of freedom, but still focus the choices by expense. By using an experience system and levels, it also sets a rate of advancement limit, so skill based tasks have a maximum possible range. Guarantees that any character who loses focus suffers compared to those who don't, but also allows characters who want a key skill or two off class-concept to get them... at a price.
Classless Level Systems a very few games have no classes, but still use character levels. Flying Buffalo's Mercenaries, Spies, and Private Eyes has skills, but they are rasied by "Use it enough"; character level raises attributes in MSPE. A couple others simply tell you to advance a set number of skills when you level up, or a few attribute points.
Some of these actually have classes, but the class only determines special abilities, and those don't change with level; level determines attribute or skill advancement. The best example of this is FGU/Goblinoid Games' Starships and Spacemen.
Use it to have a chance to it as in Chaosium's BRP and Pendragon, FFE's MegaTraveller or Mark Miller's Traveller. These systems, you mark what you use. At end of session, season, year or whatever increment the designer (or GM) chose, you make a roll to see if it goes up. Almost always requires tracking instruction hours to acquire new skills, almost always limited solely to gaining skills, not other abilities. Reshapes the character to be good at what the party has been doing, requires plenty of bookkeeping, hard on character sheets. Pendragon uses years, BRP session, MegaTraveller months, and T4 a limited number per session. The rate of rolls has a strong influence on the sense of both completion and advancement.
Use it enough and it goes up as with MSPE, Mouse Guard or Burning Wheel. Each skill tracks experience separately. When enough counted uses accrue, it goes up. MSPE, it's a set XP per use, and when the skill levels up (using the same XP track as character level), raise it. Burning Wheel requires a number of easy uses, a number that are close to ability, and a few that are "guaranteed" to fail but tried anyway. Mouse Guard requires successes and failures. The various methods of earning the experience make the games play very differently. They all share an accounting nightmare, namely, XP tracks for every skill. The good news is that advancement is near guaranteed; the disadvantage is that some players will work the system to get the needed difficulty. Mouseguard has the problem of mandating failures, which was the #1 player complaint when I ran it.
Class for starting skills, points thereafter A few games use template style character generation, but it's open points thereafter. Classic Battletech RPG 2E is the primary example, with Cyberpunk 2020 being the second one, but d6 system (including WEG Star Wars), and Shadowrun also allow it (but don't require it). It makes for fast, carbon copy character generation, but with the ability to add what you need later.
Class for special abilities only just like one or another of the above, but each character is in a class that either allows a special skill (as in Cyberpunk 2020), or a specific special ability subset (as in WoD/Storyteller). The advantage is that you usually get suggested skills, but are not stuck to those. The drawback is that the special abilities often drive character concepts in certain directions, and bucking those can be a problem.
And I know I've not hit all the bases yet, just the broad brush strokes of most of them.
In general—there are exceptions, of course—class/level systems tend to be less flexible than point value systems and point value systems tend to be more complicated than class/level systems of roughly equal levels of detail. There is of course a spectrum between these poles (and games that lie outside the scale entirely) as aramis has already pointed out.
What I'd like to address, however, is the consequences of each design by comparing the pure, polar opposites.
If you take a pure class/level based system with random characteristic generation (unpolluted by selected skills/feats/talents/whatever) your consequences are:
If you take a pure points-design-only system (unpolluted by random attributes, templates, package deals, etc.) your consequences are:
For my money, the real difference lies here:
A class system, or any set of "splats" such as found in *WoD games, asks the player, "Do you want to play this or do you want to play that?"
A point-construction system asks, "What do you want your character to be?"
The difference is the same as the difference between multiple-choice and essay tests. In my experience, new players like the limited choices presented by splats and more experienced players tend to chafe against them.
I've had fun playing and running both kinds of games but I'll pick a constructive system every time, given the choice.
Having played or GM'ed most of the systems mentioned in the previous posts, I think it boils down to three types of player types: Beginner (Structured), Intermediate and Advanced(Flexible).
Players who are just starting to get into RPGs, in my opinion, tend to like a more 'structured' character creation system, using classes: 'Do you want to fight, cast spells, heal, or sneak?' The player has a better grasp on their role in the game and their options are probably tiered within a particular character class.
Intermediate players will want that initial structure, but are likely to multi-class or play characters that are inherently jack-of-all-trades (bards). They will enjoy a system that offers classes, but that also gives them more options and flexibility within that class.
Players that want as much flexibility as possible, tend to be veteran players. Throwing a ton of options at them doesn't intimidate them as much because they have been exposed to much more stuff (class-wise and system-wise). I think point-design systems are more 'realistic' in the sense that we ourselves are composed of lots of skills (many that have nothing to do with one another). And that is what makes us interesting.
If you can't tell, I greatly prefer point-design systems. I also have a warm spot for class-less systems. They just feel more 'organic' to me. In addition, I have a great primordial 'dislike' for players who try to make the perfect 'build' in RPGs. Don't try to make the perfect warrior, try to make a fun warrior.
One more thing to consider is that characters in the different kinds of systems will advance at different rates. In a level-based system, the characters will have sudden changes in their power level and capabilities, like someone hopping up a staircase. With point-based systems, improvement is usually more of a gradual escalator. They end up in the same place, usually, but the ride is different. Level-based characters are predictable for longer stretches, but when they add a new level, it can change things dramatically. Point-based characters tend to change incrementally, adding a skill or reducing a flaw, rather than saving up to add a lot of new stuff at once.
As to who favors what, in my experience it usually comes down to what kind of games you've spent the most time playing. People who've stuck with D&D and its variants often prefer levels, because they're accustomed to having that level of structure supporting their character. People who've spent more time with things like the Hero System or GURPS (and perhaps even White Wolf games) often prefer point-based games, which allow you a great deal of control over character ability.
Then there are those of us who grew up playing TSR's old Marvel Super Heroes game. We're used to rolling up a random character who makes no sense and never advances, but is lots of fun to play.
I am a big big big fan of the Hero System which as you mention is points based. It has to be said I am also a fan of GM created characters (which I know many people consider heresy :D ) because I feel the best stories are written round the characters. When I start building a campaign I cannot do it without building the characters that are going to drive the story. The characters and story being intertwined. Of course there is no reason why a GM not could do the same thing with class based system but I feel points systems suit me better.
Even if I allow players to create their characters, I tend to build them. I quite like the process of creating characters as simple text write-ups and leaving it up to the GM match the mechanics. I have seen some excellent "beginners games" run for people that have never gamed before done in exactly that way. Even if not GM created a GM should always heavily vet characters before allowing them into their campaigns, with highly flexible point based this is doubly true.
So point based offers me the flexibility and balance I most desire as a GM. I won't comment on the merits of class/level based system since I haven't used any in years ;)
