There're three different character races in the game, nephilim, slithzerikai and humans.
Humans are your obvious average joes, but of the Avernite variety. ( ie. paleskinned and fairly thin. ) They have no innate experience penalty. They also gain no bonuses to stats, unlike the other two. Any experience penalty equates to about 5-6 levels towards the end game, which is pretty much nothing compared to the stat bonuses the other two get.
Nephilim are underground cat people. The vast majority of them are extremely savage, living as brigands or in their own clans as they raid others. They gain a bonus ( that grows with their level ) to their gymnastics, bows and thrown weapons. They also have a 10% experience penalty.
Slithzerikai are underground lizard people. They're our foes in the current game, in the form of the Slithzerikai Horde, but there are still a lot on Avernum's side. They gain a bonus to pole weapons ( this grows with their level ), 10% more health and a 20% resistance to acid and poison. They also have a 20% experience penalty.