1) This system makes posting too much like karma. All we need is a site full of karma whores (sarchasm).

Agreed. What we have right now are people reaching high rank without ever contributing anything useful to the site. The fastest way to gain XP is to simply use all your votes every day, and people do that regardless of the quality of the nodes they are voting for. This makes it impossible to gain large amounts of XP unless other monks think you deserve it.

2) A person might post a very astute and intelligent answer to a question burried deep in the system. Nobody might see it/care about it except for the person asking the question. They wouldn't get XP for it.

Yes, that's possible. It happens all the time now. There is no real way to fix that, except to say that I and some other monks that I know of make it a point to search out these posts and vote for them. I think more people will do that, if they don't get a particularly large reward just for voting.

3) I view XP as a measure of site-participation. Voting/Posting/So Forth are part of site participation.

XP should be a measure of site participation, but it really isn't. The best measure right now - the means by which I measure my respect for other monks - is not their XP, but the number and quality of their posts. I respect people who answer questions throughly and frequently. I respect people who make intelligent contributions to discussions of new features or events. I respect people who make insightful and interesting points in Meditations, or those poems that make me stop and think for a minute.

I don't respect, and see no reason to respect, people who simply gather XP by voting out every day. Where is the contribution that they've made?

4) A lot of things are voted way up that aren't really adding that much to the site, but deserve to be voted up. Someone posting something minor that is cute or funny would get mad XP just for posting something cute or funny.

Exactly. If something gets voted up because it's cute or funny - so what? That's part of the community, not just Perl code. But if things are getting massive amounts of Rep, even when they don't deserve that... why is that? Simple. Everyone wants to vote out and get that XP. This system removes the incentive to do that. That, in fact, is the main point behind it.

We can't fix the fact that funny replies get more rep than some really well-written answers. That's a "society" problem. The only way to fix it would be to appoint a committee to rate and evaluate every post for quality - and we are NOT going to do that.

Update: Following ybiC's response I decided to reread and take a look at this. I hadn't meant it to be condescending, but I suppose I can see where others might think it is.

All I meant by it is that any cure for the problem that we can possibly implement would be worse than the disease. We spent a lot of time discussing this problem when we were designing the system, and in the end decided there was no fair way to fix it. All we can do is ask people to remember the point when casting their votes.