What is pickpocket experience based on?
Solution 1:
It's based on the value of theitems you steal.
Easy way to check this: Go to a trainer, pay them for training 1 level of a skill. Then pickpocket the money you paid them back. Then pay them for training 4 levels, and pickpocket that money back all at once. You'll see a much greater skill increase.
(Incidentally, you can use this 'exploit' to reach a fairly high level before even leaving the first village in the game.)