Really needs to change. When you play sidequests, you get, say, 50 xp for each stage, and a 250 payoff. KIlling monsters nets in the single digits.

Let me just say how broken this system is:

I was at level 23 at the beginning of Chapter 3
I was at level 29 by the time you fight a certain monster boss in chapter 3. I did no side quests.

The numbers really need to be equalized!

I don't understand your problem. Killing monsters isn't supposed to give you tons of experience because this is a linear game, so having quests give you the majority of your experience seems like a logical way of ensuring that you're not overpowered/underpowered at various stages of the game.

On my first playthrough, I went with Iorveth and reached lvl 35 by the end of the game. I missed some quests.

On my 2nd playthrough, I went with Roche, and reached lvl 33 by the end of the game. I didn't miss any quests.

On my 3rd playthrough, I went with Iorveth, and reached lvl 35 by the end of the game, though experience-wise, I was lvl 38. I didn't miss any quests.

And I kind of agree that you get too much XP in chapter 3, where you don't really need it.

The game needs some rebalancing.

I think they give more xp for proceeding though the story by doing main quests rather than grind your way up by killing monsters that keep on respawning.

I had a problem of my own about leveling up though its a bit different from OPs i figured i just put it up in the same thread.
After Ch1 i played twice thorugh roche's path and twice siding with Iorveth and each time on roche's path i ended up on level 25 or 26 after ch2 and on level 29 or 30 on iorveth's path.
Am i missing something while playing roche side (i think i did almost all the side quests) or is there really an imbalance /w the two sides when it comes to xp??

They are indeed not balanced.

Check my previous post.

yeah, i did check it after i finished writing mine, .. ( sheesh, i kind of feel supid)

[Spoilers]
And while we're on the topic, don't the quests on iorveth's side seem more well done like succubus quest or baltimore's nightmare . it was really cool the way you find it within a main quest (if you keep your eyes open ie) and the dream projector bit. plus Mahakam is much more fun to explore the kaedwani camp. I mean the roche (he is awesome) was the only reason i chose his path after i had already gone that way once.

^Yes. Vergen sidequests and area are much better.

Haven't playe Iorveth's side yet, but I enjoyed the Roche side immensly. I wonder if one guy oversaw it all, or if there were two different people designing quests for the areas.

its not Mahakam, its Vergen, Mahakam is an region inhabitated by dwarfs somewhere else