How can I use experince points?

[cownip]

How do you increase your skills and abilities?

[adeyke]

Generally, any skill/ability will be increased by doing something that requires them (e.g. throw things to increase throwing).

[CoredesatChikai]

As for experience points themselves, you don't use them, and they're generally not good for anything in this game (they would determine the frequency and difficulty of monster encounters in QFG1, but not in this game).