SPOILER WARNING: This post contains spoilers for the Curse of Strahd campaign. Please show your DM a little respect and don’t read this if you’re a player in the campaign.
Curse of Strahd recommends that you use the milestone system for awarding xp and leveling the PCs. I strongly encourage you to follow that advice. Insisting on using encounter-based xp awards is just going to create a mountain of unnecessary work for yourself. Trust me, you've got plenty of work in store for you if you want to make this campaign as awesome as it can be. You really don't need any more.
Furthermore, Curse of Strahd uses a variant of the milestone system where each milestone equals a gain in level for the PCs. There are no major or minor milestones (although you could come up with them, but again, avoid creating more work for yourself). Each time the PCs achieve one of these milestones, they all gain a level.
Because of this, I recommend keeping all the PCs the same level and not worrying if a given player misses a session or two. If, however, you have a player who is chronically absent, then you could judge if that PC participated enough to gain a level when each milestone is reached.
We are given the following guidelines for our milestones in the book (page 6):
Finding Artifacts. Recovering each of the artifacts of the campaign is a milestone (the Sunsword, Tome of Strahd and Holy Symbol of Ravenkind). The locations of these artifacts are either determined by the DM or using the Tarokka deck. I didn’t want PCs to gain two levels at once, so if one of the artifacts is in a particular location, I don’t also give them a milestone for achieving the main goal in that location or defeating the main bad guy.
Defeating Villains. Defeating the featured antagonist(s) in an area. The example given are the hags in Old Bonegrinder.
Accomplishing Story Goals. Accomplish something significant. Examples given are lighting the beacon at Arynvostholt, thwarting the druid ritual on Yester Hill, and forging an alliance with Ezmerelda.
Below are the milestones I’m planning to use for my Curse of Strahd campaign. Keep in mind that I started the PCs at 3rd level, and they gained 4th level after completing Death House (the book suggests starting PCs at 1st level and they gain level 3 at the end of Death House). If you're running more "by the book" you may want to add in another milestone if you also want your PCs to have the potential to be 14th (or even 15th) level when they face Strahd.
The milestones suggested as examples in the book itself are bolded below. This, I believe, is where Wizards’ statement that the adventure goes to level 10 comes from. If, as suggested in the adventure, the PCs are level 3 when they finish Death House, and they gain a level for each of these milestones, they would be level 10 after completing all seven of the example milestones. However, it is clear in the book that these are just some examples and are not a list of all the milestones. This is why I say the adventure really goes well beyond level 10.
Here are the milestones I came up with. I’ll explain more why I chose the ones I did after the list.
1. Defeat Death House (Appendix B)
2. Recover the Tome of Strahd (Chapter 4)
3. Recover the Sunsword (Chapter 12)
4. Recover the Holy Symbol of Ravenkind (Chapter 4)
5. Defeat the Hags in Old Bonegrinder (Chapter 6)
6. Light the beacon of Argynvostholt (Chapter 7)
7. Thwart the druid ritual on Yester Hill, or defeat the tree blight (Chapter 14)
8. Forge an alliance with Ezmerelda d’Avenir (Appendix D)
9. Defeat Baba Lysaga (Chapter 10)
10. Return the bones to St. Andral’s Church (Chapter 5)
11. Explore the Amber Temple & encounter the lich (Chapter 13)
12. Potential for PC-directed milestone. Perhaps finding the third magic gem
13. Defeat Strahd (Chapter 4)
There are some big events that I did not assign milestones to. For instance, you could easily argue that returning the Wizard of Wines winery back to operation would be a milestone. You could also argue that encountering the Abbot of St. Markovia could be a milestone.
Ultimately, there are too many potential milestones if you use all the suggestions given in the book. With my milestones above, the PCs could be 14th level when they face Strahd if they do everything. I designed it this way because I want maximum possible level the PCs can be when they face Strahd to be level 15. I don’t think the encounter would be challenging enough if the PCs were higher than 15th level.
I also want to allow for the possibility of another milestone based on something the PCs pursue or some event that unfolds that isn’t part of the “script” of the written adventure. So having the PCs max out at level 14 is perfect. If they engage with the campaign enough to find or create a new milestone, they can be level 15 when they face Strahd for the final showdown. Of course, if they don’t complete everything in the campaign, they could be much lower than 14th level; they could even be the level 10 claimed by the adventure itself. Wizards seems to think a level 10 party has a chance against Strahd, so I’m ok with that too.
I didn’t make restoring the Wizards of Wines winery a milestone in my campaign for a couple reasons. First, the PCs found the Sunsword in the winery, and I didn’t want them to gain two levels at once. Also, restoring the winery to full capacity involves defeating the druids on Yester Hill and defeating Baba Lysaga, both of which are milestones of their own. Also, technically, the PCs would need to recover the third missing gem, the location of which is not given by the adventure. So if they pursue that, I would need to come up with its location, and that could easily be another milestone.
I also tried to set up milestones so there was a milestone associated with each of the major chapters of the adventure (some chapters don’t have much going on, so don’t warrant a milestone).
I see my list of milestones as a guide for the campaign. It allows me to chart the progression of the PCs and make sure it’s in line with what the campaign is designed for. In the heat of play, I try to keep the progression well-paced. So a given milestone/level gain may be delayed a session or come a session early, just to try to keep the progression pace steady. I aim for an average of two to three sessions per level. I want to avoid PCs gaining a level two sessions in a row, and I want to avoid PCs going more than three sessions without gaining a level.
At the end of the day, though, I want the milestones and the level gains to make sense. The PCs should level when they accomplish something important. So I try to balance that with the pace of progression. It’s usually possible to do so. If nothing else, you can always speed up or slow down a session so it ends up where you need it to.