You do level up in Planetside. You get experience for making kills and taking territory. When you level you gain proficiencies, like if you have enough skill points you can train as a pilot, or speciallize in heavy weaponry. Except leveling up doesn't feel like you're getting stronger, it more feels like you're just getting back what you should of had in the first place, and after level 10 you start running out of things to buy. Everybody ends up being a jack-of-all-trades.
Basically you character sucks when it starts and by level 10 it's EXACTLY THE SAME as any other character. Being a level 1 character is like trying to play Battlefield 1942 with only the pistol, and by level ten you can drive tanks and fly helos.