It may seem kind of dumb, but it's a situation that really haven't come up with me. If a character multiclass as 3 classes, since the favored class of a race doesn't count against them as a penalty towards experience gains if the levels between classes are far apart, do they count if the favored class is in between the two others? For example, an elf is a level 1 rogue and a level 3 fighter, but as a wizard they are level 2. Since an elf's favored class is Wizard and wizard doesn't count against experience gains, does it count to fill in between the Rogue class and the Fighter class?
No. You will still suffer the XP penalty.
From the PHB (p60):
Uneven Levels: If any two of your multiclass character’s classes are two or more levels apart, the strain of developing and maintaining different skills at different levels takes its toll. Your multiclass character suffers a –20% penalty to XP for each class that is not within one level of his or her highest-level class.
Races and Multiclass XP: A favored class (see the individual race entries in Chapter 2: Races) does not count against the character for purposes of the –20% penalty to XP. In such cases, calculate the XP penalty as if the character did not have that class.
Using your example:
For example, an elf is a level 1 rogue and a level 3 fighter, but as a wizard they are level 2.
We calculate the XP penalty as if they had no Wizard levels. So, Rogue 1 / Fighter 3. As these are more than 1 level different, they will have the penalty.
Even if the character wasn't an elf, being Rogue 1/Wiz 2/Fighter 3 would give you a 20% XP penalty, because there is a class "not within one level of his or her highest-level class".
To avoid the XP penalty, all classes other than your favored must be within 1 level. Taking the example elf to extremes, that could be either:
- Rogue 1/Fighter 2/Wizard 17, or
- Rogue 9/Fighter 10/Wizard 1