Experience Points, also known as XP, are a new Real Time Strategy feature in Pikmin: Before the Impact to use for Upgrades and Leveling Up. Experience Points are obtained by defeating enemies and bringing their corpses to the onion/ship pod.
Upgrades in Pikmin: Before the Impact are used to make a captain stronger, faster, etc. The Upgrades are split in 4 category: Gloves, Suit, Boots and Whistle. Upgrades are purchased with Experience Points which can be obtained through defeating enemies to onion or ship pod. Experience Points are taken away from your total count when you buy an Upgrade which can result in a Level Down but of course the results are amazing. See the Upgrades page for better details.
Leveling up is a big part of the games main function as it happens when a certain number of XP is obtained. Leveling Up is different for each captain but each Level Up includes improving all 4 of the Main Stats Power, Command, Stealth and Speed. Captains Level Up till they are Level 100 which means they can't Level Up anymore but can still purchase Upgrades unless they already have all of them. See the Stats page for better details