I feel that the offensive ability of characters outweighs defensive ability. As I understand it, the attack level is determined by the level of the skill used. However, armor class is determined by armor and dexterity.
This means that offensive ability goes up, but defense stays constant. An argument can be made that hitpoints represent defensive ability, but I don't think it's enough. Let me illustrate my point:
My character has an attack level of 4 with a broadsword. He's fighting 3 1st level attackers wielding the same weapon, with an attack level of 2. All stats are 3 and no armor is being worn. All armor class values are at 1. Let's assume that I won initiative every time.
At attack level 4 vs 1, my character will hit unless there is a fumble, doing an average of 4-5 points of damage, disabling one attacker. When they attack, they will hit on 3 or higher (66% chance to hit). If one of them hits, which is likely, my character will lose 4-5 hitpoints. If both hit, which is fairly probable, my character will lose 8-10 hitpoints on average.
The next round, my character disables another opponent (barring a fumble). Now, the last opponent attacks, and he has a 66% chance of inflicting an average of 4-5 points of damage. If he hits, which is probable, and both hit during the last round, my character is disabled with an average damage roll. If he doesn't hit, my character is still one hit away from defeat.
This encounter consisted of a rather rare 4th level hero in Elthos versus three common 1st level characters. It even assumed that initiative was won by the hero every time. The results described above are fine from a "realistic" point of view. However, I don't feel that these rules capture the feel of heroic fantasy. As is, a hero is too easy for anyone to damage, and even a small increase in the number of opponents can overwhelm a superior character.