The third option is the skill tree (like in NeverWinter Nights), where your early decisions on 'which' skill to pursue unlock upgrades/advances along that skill path. Obviously, the choice of class also influences 'which' skills you have access to, and which/how many of them have upgrades later on. This goes along with the people who like 'allotable skill points', because you plan early on in the game "who" you want your character to develop into -- a paladin who uses magic, or a gladiator with multiple attacks / critical hit capability, or a thief with high dexterity and good ranged attacks, etc, etc, etc.