The level system replaces the licences as the main method of unlocking events in Gran Turismo 5. It also restricts the cars that can be bought by the player. By competing in events, experience points are gained, and once enough points have been earned the level increases.
A-spec[edit]
In A-spec, there are three main game modes where experience can be gained - A-spec events, Special events and Licences. For the licences and special events, experience is gained just once after completing the Bronze, Silver and Gold objectives. The experience points accumulate, so if you were to win Gold at your first attempt, you'd get the experience for Bronze+Silver+Gold.
In A-spec events, the experience points are obtained simply for competing in the race, and can be awarded as many times as you like. However, the amount of points between levels increases as you reach the higher levels, meaning early events which initially allow you to get up to a new level quite quickly, make much less of an impact on your level progress later in the game when you're at a higher level.
The level system means there's no strict method about what order to complete the events in, however the easiest may well be to ensure a good mix of licences, specials and A-spec events in order to ensure you're obtaining the easy experience points on offer elsewhere.
B-spec[edit]
In B-spec, there is one game mode where experience can be gained - B-spec events. As with A-spec events, the experience points are obtained simply for competing in the race, and can be awarded as many times as you like. For B-spec however there are two different levels. The first is your overall B-spec level which takes into account experience points obtained by all B-spec drivers. The second is the individual B-spec drivers' level. For entering B-spec events, your overall B-spec level what's taken into account.
Given there's no licences or special events to gain experience from, all experience points must come from the B-spec events. If you're constantly winning races at the first attempt, there may come a time in the high 30s when you need to revisit previous races in order to get enough experience to progress to higher events and series. 650PP Seasonal events help here.