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Update 8: Interlude 2: Ratings and Skills. Also Locklear's Mustache.
Hey guys, what do you want to do tonight?
"Well I'd like to have a word or two with the guy who called us a bunch of local renaissance fair characters."
"Grrr.."
"Yeah, fuck that guy!"
"Shut up, Owyn!"
Hey now, he did recant what he said after he saw your portraits in the manual.He even said you looked charming! Instead of taking out your anger upon him, let's gently talk about you guys and how your ratings, skills and mustaches work.
"Oh alright. He's lucky I'm such a nice guy, is all."
"The nicest..."
"Shut up, Owyn!"
Understanding Ratings and Skills
Using Locklear's profile page after he was hit by the trap, we can see his ratings displayed at the top, while his skills are represented at the bottom of the screen using swords. A red bar graphically represents the numerical figure displayed. Skills displayed in red indicate that the skill level has changed since the last time it was viewed. NOTE: A character can only improve skills by practicing them. To improve the rate at which a skill increases, you select the sword handle that represents the desired skill. The fewer skills selected, the greater the increase - while the more skills selected, the slower the increase. Skills also improve slowly if none are selected.
This brings up the point that a poster in the thread mentioned that when training - such as Combat with Sumani - if you select only the skills that the trainer increases, you get an additional boost to your skills as well.Given that you'll generally have an idea of what skills trainers will increase, it is a good idea to take advantage of that when you can. Each character in the game has four ratings - Health, Stamina, Strength, and Speed - and a number of skills, such as Lockpicking, Haggling and Stealth.
We've already seen some of these skills in play in the updates and they've been discussed in posts in the thread as, for example, a certain skill level in Lockpicking is needed to disarm various trapped chests throughout the game world. It isn't necessary to understanding ratings and skills in order to play the game, but it does help. In my first playthrough ever, I didn't even know about the character skills and was still able to pretty pretty far.Health and Stamina have their potential values (essentially maximum level) and their current level. For example, Locklear may have a max stamina of 45 but him getting his ass kicked in battle, or being blown apart by a trapped chest will quickly bring that value down to zero, in which case everything suffers for him. Fortunately, rest both outdoors and at inns will increase values such as health and stamina.
Improving Potential Ratings and Skills
Improving character's potential values is difficult. While ratings have no upper limit, changes are gradual improvements over time. Skills vary between 0 - 100 and increase the more they are used. For example, as one poster mentioned, if we go back to Squire Philip's chest, I could train Gorath on his lockpicking skill over and over, because the skill itself will go up a fractional amount each time the character successfully picks a lock.The closer it gets to 100, the harder it will be to affect a change though.
Conditions
Already touched upon this after Owyn exploded, a character can suffer from various conditions throughout the game, whether they are sick, drunk poisoned - or near-death. On the encamp screen, characters who currently have conditions will be highlighted in red. Some conditions will be alleviated by prolonged rest, others require you to hoof it to a temple for aid. Sick characters can be healed by resting for extended periods of time.
Health and Stamina
Although they are separate ratings, together they determine a character's overall physical condition. When injured, damage sustained is subtracted first from a character's Stamina rating. Once that is depleted, the character's Health then begins to go down. Once that reaches 0, the character is knocked out, critically injured / near-death. This is bad. The ratio of the current Health rating to the Potential Health rating affects the remainder of the character's ratings and skills by a proportionate amount. If a character's current Health is 50 percent of his potential Health - his other ratings and skills will be automatically be at 50 percent their potential values.
In other words, if a character is at full health and stamina, they can take a few hits and be okay, but if they keep on getting beat up to the point where their health is quickly going down, their skills, both in combat, defense and everything else fall as well.
Low Health = Low Skills = 
Strength and Speed
Strength represents a character's physical strength and determines the amount of damage a character can inflict in combat. It decreases when the character's Health is reduced, but it will improve - slowly - with each successful sword or staff strike.Speed is expressed in terms of "steps" which a character may take during his turn in combat - the speed rating will not change over the course of the game Unless you hack your file
Each skill has its own description as well, but we'll get more into those in another interlude update.
Let's move on to our first...
Character Profile: Seigneur Locklear
Locklear - I notice your mustache is slightly upturned in this shot. Care to explain the difference?
"I was highly aroused at the time."
Ew. I wish I hadn't asked.
"Aroused to do battle. Don't make me out to be a pervert."
The youngest son of the Baron of Land's End, Locklear has been the constant friend of Jimmy since they were boys. His mind is razor sharp; an attribute that has made him a valuable asset to Krondor. Although physically slower than Jimmy, he can usually defeat him in rapier duels because of his shrewd combat strategies. Siegneur Locklear sports a healthy tan year round as he often vacations near his father at Land's End. He is one of the finest swordsmen in Midkemia.
"Physically slower? Is that manual calling me fat?"
No - It's just a hint that James is just faster then you in battle; while you can actually hit worth a damn.
"Oh, well good then."
The manual is pretty sparse on character descriptions. The Midkemia Wiki has a more fleshed out character summary, including pretty much everything that happens in Betrayal at Krondor, so there are spoilers. I'll only post what his background leading up to this game.
A shy person, his life changed forever when he decided to join James and accompany Arutha to investigate the attempts on the Prince's life. Their journey brought them to Armengar, where an exiled noble of the Kingdom, Guy du Bas-Tyra, commanded the inhabitants of the city as the Kingdom's first line of defense against the moredhel invasion. Here, Locklear met and fell in love with Bronwynn Alpress. Their relationship was tragically cut short when Bronwynn was killed by a moredhel soldier. Squire "Locky" died that day, and the future Seigneur Locklear was born, as he began cutting down moredhel left and right, as his friend James mourn the loss of his friend's innocence.
Armengar was soon abandoned, and the refugees fled to Highcastle. When this city, too, was overrun, what remained of the Kingdom forces made their last stand in Murmandamus's ultimate objective: the city of Sethanon. Fighting desperate battles on the streets, Locklear came upon a girl attempting to protect her younger brothers from the moredhel. He killed the soldiers, and hid with them in the cellars, where James found him, busy, when the battle is over. Squire Locklear briefly entered military service under a daring garrison leader named Baron Moyiet who watched the Moredhel with an unforgiving eye.
Ten years of peace followed the Battle of Sethanon. Squire Locklear matured, becoming a much respected (and well-liked among the ladies) Seigneur of Krondor, as well as one of the finest swordsmen in the Kingdom. An unfortunate affair, however, saw him being "punished" by Arutha, who sent him to the border city of Tyr-Sog for a period of ten years, to which Locklear begged James to use his influence to shorten. It was during one of his routine patrols that Locklear encountered Gorath of the Ardanien, a renegade moredhel being pursued by his own kind. Initially refusing his request to meet with Prince Arutha, Locklear was persuaded when the moredhel whispered "Murmandamus lives".
"I pretty much jumped at the chance to get the hell out of Tyr-Sog. I never want to go back there again."
That's it for this post. See you in Update 9:Yabon to Tyr-Sog
"... Damnit."