My Dannak megadungeon will be based on the principle of the mythic underworld. One of the things this allows, and something I have always wanted, is a concrete, sensible rationale to regard the PCs as regular folks that dare to achieve.
Most of the NPCs of the setting will be 0-level folks just trying to get by. That is the stock the PCs spring from. Sure, they may have a couple of above average stats, or be able to command simple magics, but at the beginning of their adventures they are only barely separated from the NPCs. This is why I am definitely limiting the availability of starting classes. Some classes are just too specialized to be allowable right out of the gate, in this environment.
It is their exposure to the mythic underworld that annoints them as true adventurers. Once they have braved its dangers and faced its horrors, they begin to acquire a certain legend surrounding themselves. I see this as an upward spiral, just as the game was designed to engender. The more capable (legendary, in mythic terms) the characters become, the greater the dangers they can face. The greater the danger, the greater the reward, and if they best that challenge and return with that reward, their legend grows, and the cycle perpetuates itself. This is represented, of course, by the character gaining levels, which enable him to delve ever deeper into the dungeon, slay more powerful opponents, take their shit, and continue gaining levels.
I have been a big fan of the notion that says "If enough people believe in it enough, it must be true". I think Earthdawn pulled that off pretty well, and I love it for that. I've seen rules in later iterations of D&D that have made a nod toward it, with magic items that can gain in power, but that never really satisfied. This, though, makes sense to me. The mechanics are already in place, with D&D's levels. All I needed was a campaign specific "dressing" (dare I say "narrative"?) to give form to the function.
So, here we will have a group of suicidal people trying to wrest their fortune from the ruins of Dannak (the 1st level party). After some time they return with some coin and jewelry, along with tales of horrors faced and battles won. Some of their former peers will be impressed, some will thumb their noses at the modest success. Orcs and goblins, though, are no longer feared by the characters, and having tasted success, and confident in their abilities, they reprovision and head back in. With each successful foray, rumors spread, becoming legend, and the PCs are no longer even part of the society that spawned them.
Which brings me to my next point. With the bulk of NPCs being 0-level, it would seem easy for the PCs, even at modest level, to take over. To be honest, I can't really divine a way to prevent that mechanically, other than the obvious solution of giving the NPCs levels. That is too artificial, in a lot of ways. No, this has to be handled narratively (there's that word again). The players have to realize and understand that once their characters have essentially become mythic through exposure to the mythic underworld, they no longer view 0-level people as worthy adversaries. They likewise are not tempted by whatever mundane wealth could be gained by slaughtering common folk.
If a player or two has trouble with that concept from time to time, a scattering a higher level NPCs should keep them in check. Mentors, and other like-minded adventurers are sure to be present. Side adventures could even involve one of these running amok, and the PCs hired to stop them. A little object lesson never hurts.
So, that's my take on weaving exposure to the mythic environment into the mechanics of leveling. As always, comments and discourse are welcomed.