[fadetree]

The original group sharing mechanism was intended to help groupmates level at the same rate. In a full group that is the same level and the same earned exp amount and the same race/class, everyone would get an equal split. Let's say they all just dinged before the kill and are all at 0% to the next level. Let's also say the mob was worth 12% of the amount needed for next level. They will all get exactly 2% each on the kill. If they continue that way, they will all ding at the same time.
However, if one of them is 1 level ahead (but at the same amount to next level, i.e. 0%), his or her distance to the next level is larger because needed exp amounts for the next level are larger than the level before. In order for them all to 'travel' the same distance to the next level on a kill, the other 5 members get 1.8% each and the one who is a level ahead gets 2.10% of the exp from the kill. If they stay together for the whole level they will all ding at the same time again, but that time will be longer than if they were at the same level.
Add in the ridiculous hybrid and racial penalties, and you can see that the 'distance to the next level' is much larger for some than for others, and the earned exp is split according to that distance, again to keep them all travelling the same distance to next level.
However, there are offsetting benefits to having groups of mixed levels, races and class. If your group doesn't have a decent tank, for instance, letting a Paladin tank for you might increase the kill rate by quite a bit. Letting a higher level Bard CC for you might also increase the kill rate. Having a ranger pull outdoors might as well. So, it's not totally cut and dried, there are a mix of factors to consider.
And, most importantly of all, if you are extremely concerned about your leveling rate and all you want to do is get to max level as fast as you possibly can, you are not really doing everquest right, in my opinion. I think they should have just not shown the exp bar at all.