In DeathSpank like many RPGs you gain XP by completing quests and killing creatures when you have aquired a certain amount you will level up. When you level up you become stronger, gain improved stats and are able to equip better equipment.
The max level in DeathSpank is level 20. A player should be able to reach this level by completing most of the side quests and main quests and by killing a lot of creatures.
Every creature and boss in the game will have a level. The enemies will level up with you this will prevent players becoming too strong and will keep it challenging. Generally Bosses will be roughley a few levels higher than a player and normal enemies will be equal or lower level.
There will be options for customization through Hero Cards. As you level up, you will be forced to choose from three cards, each with its own special ability. You can only have five hero cards equiped at once but these can be chosen and changed when required. A card might give you more damage, heath or allow the player to equip items higher than the characters current level.
DeathSpanks side kick when controlled by another player will be a similar level to the main player but is usually weaker than him.