I'm a completionist so while playing BG1 I have explored all areas and done all side missions that have come up, which is probably most. Still in Chapter 5 (but not much left), when the party headed over to Durlag's Tower. Have previously done the Ice Island area, but not Werewolf Island. Never done the expansion pack before. Right now I'm at the last level of Durlag's Tower - at least I think so. But we are already running into the XP cap. All characters are between 155,000 and 160,000 now.

In short, there is still a lot of XP to be had, and we've already reached the cap.

I'm thinking about removing it. However, would that be considered cheating, and will it unbalance the end of BG1 and beginning of BG2? Not played BG2 yet, but I intend to take this character into it.

Looking at the XP needed for more levels, a few characters will probably go up one more level, while others will probably not. I'm in two minds about it. Don't want to unbalance the game, but don't like the XP counter to stop either, when I'm busting my ass doing piles of quests.

use the cap remover - it will not make too big a difference on BG2 - 2 or 3 levels more at the start of BG2 will only make Irenicus Dungeon a little easier, but afterwards you will barely notice it, specially since you will only take your main character there (unless you are using BGT and importing some NPCs)

Was adviced elsewhere to not remove it, but considering I've not done any grinding and have just played my normal completionist game, I think I'll remove it. Some won't go up another level, while others may go up 1, so it's not a huge deal I would think.

Am also interested to see how much more XP it's possible to get in this run. Seems weird the cap is so low if a 6-character party (with one multi as well) can get for example 250,000 XP each.

Will only import my main character and then go blindly into BG2 as I have not played it before. Look forward to it :)

(Durlag's Tower is one seriously TOUGH sucker btw. Am down on the lowest level now, I think, so not too much left. Very rewarding when I finally beat things though, so I have enjoyed it a lot. They don't make games like this any more, that's for sure.)

I'm playing BGT, so there's no cap in the BG1 portion, and I ended at around twice the XP I'd normally have. It was around 340k XP, which means lvl9 Ranger-Fighter-Cleric, lvl10 Mage and lvl11 Rogue.This is about one level higher than vanilla. If you think it ruins balance it's up to you, really. It does make a difference. Small or big depends on personal view.

Just to clarify something though, a sizable chunk of the XP came not from missions, but from BGSpawns mod. And here's my dilemma, as I search for my perfect modded BGT setup. I like that mod, it introduces variety on random encounters according to your level, some (very) hard, but equally rewarding. Should I strike it out of the list or keep it? I like being a little stronger but I value challenge and balance in a game. I would appreciate some input on this.

I am currently starting another playtrought using BGT, i´m using the Unfinished Business mods (both for BG and BG2 part of BGT) and SCS and SCSII (for BG1 and BG2 parts)

This time i will play a Human Ranger that i pretend to dual to Cleric at level 7 and i made a rule with myself: the only NPCs i will take with me for the entire BG1 part will be Imoen and Jaheira (SCS allows you to leave Khalid behind and get only Jaheira) -

I will also dual Imoen to a mage when she reaches level 7 thief (so i can get 100% on Open Locks and Find Traps) - any other NPCs will only be part of teh party if i need them for any NPC-related quest (like Minsc to get Dynaheir) and immediatelly sacked after.

Because of the way BGT handles NPCs, both Jaheira and Imoen will carry their experience over to the BG2 part of the game, but i believe that the added challenge of SCS will balance the added levels out - what i like most on SCS versus the Tactics mod is that SCS mostly makes the AI smarter instead of simply increasing the enemies power like tactics does - and removes a lot of nerfs that the enemies have that the player does not.

If you are afraid that removing the XP cap will make the game too easier, specially on the BG2 part of the game, use the SCS and SCS II mods as they increase the challenge without cheating on the computer behalf - and makes the game much more interesting...

Sorry, I didn't mention that I already consider SCS I&II staples to the above said perfect mod setup. And I don't worry about BG2 being affected, since 150k XP is insignificant balance-wise even on the first chapters.
The only thing giving me second thoughts is how one level higher party affects the final battle in BG1.

Side note: The prebuffing in SCS is really annoying, some times stupid even. Having each battle with a cleric/druid start with a -2 penalty in saves due to instant cast Chant makes go *&!($%!*&$%! every time.