Starting level in d20

The level system in d20 performs two jobs really well:

1) It gives structure to the game by giving a ready goal for players, guaging character power levels, and giving a fixed point of reference ("5th level Fighter" means something. Try describing the power level of a Brujah thug so concisely).

2) It emulates the "hero's quest" form of campaign play very well. It makes perfect sense for Frodo to leave the Shire at 1st level, and return at 12th (or higher). It likewise makes sense that Luke leaves Tattooine at 1st level and returns at 15th.

For most purposes, starting at 1st level is advised. New players will be less befuddled by the options than at higher level. Characters played since 1st level feel more 'real' than those created at higher level. And the game runs best at levels 3-12 (or thereabouts), so starting at 1st level gives the optimal game experience (2 levels to get used to the character, and then the run of good stuff).

However, starting at 1st level is not always ideal. If you want to run a "Lord of the Rings" game, you have three options:

1) The characters start at 1st level, and at the start of the book. The PCs are the hobbits, or equivalently useless characters.

2) The characters start at 1st level, many years before the start of the book. The PCs are Aragorn, Legolas and Gimli, but have to adventure for several game years before they're even ready to start the 'real' campaign.

3) The PCs start at higher level.

The same issue crops up if you want to run the Trojan War, the Quest for the Holy Grail, or the like.

There are also cases where you might want to start at higher level, but not give out XP. For example, Jack Bauer doesn't noticably become any more competent between seasons of 24. If running that style of game, you probably don't want to give out XP. Likewise, if running Transformers d20 (more on this later), you'll probably want to start at a reasonable level, and then not give out any XP at all.

Finally, if you require characters to begin at 1st level, you automatically disqualify any race with a Level Adjustment. This may not be a problem - the LA rules aren't terribly good anyway. However, if you like the occasional Drow PC (or whatever), you can't do it except at higher level. (Caveat: you could give each player a 'free' LA, allowing them to play more powerful races at 1st level. However, if you do this, you won't be seeing any humans in the group, unless you somehow compensate them for their loss.)