They've said all units, regular ones and heroes, can level up. Not many specifics though. You'll have to search around for some more detailed info, try the search feature and 'level' or something. One thing they've said is that units, like swordsmen battalions - when they level up they'll get skillpoints that can be assigned to various stats. Don't recall them mentioning if heroes worked differently.
This thread has some stuff regarding it, look for Joseph and Kon's posts. http://www.reverieworld.com/forums/s...ighlight=level
There are some other threads on the subject, if you look around.