First off, let's start with player experience. According to the 5.2 official notes:
"Winning a pet battle versus a team within 5 levels of the player's highest-level pet will now award player experience."The underlined portion should definitely be noted. So while it's possible to level by participating in battles, it's not enough to simply engage in any type of Pet Battle. If you have a max level pet (lvl 25) in your collection, this means you'll need to find (at minimum) a level 20 wild pet to battle if you desire player experience for your toon. You have your pick of Netherstorm and Shadowmoon Valley in Outlands or Borean Tundra and Howling Fjord in Northrend for level 20 wild battles.
For those that don't have a level 25 pet yet, find your highest level pet and subtract 5 from it. That will give you the minimum level pet you can gain player experience from. From there, you can check the Zones By Pet Level to determine where you can go for pet battle player experience. In some cases, you may need a higher level friend to escort you around.
I took my level 86 first to Outlands to check out the level 20 and 21 pets first. This brought about some interesting information.
- Level 20 battle yielded 62250 player experienceIt would seem that if you engage in a match with a higher level pet, you'll receive more player experience. The same pattern occurred in Northrend and Pandaria.
- Level 21 battle yielded 66400 player experience
- Level 23 battle yielded 74700 player experienceIf you choose to use Pet Battles to level up an alt, your best bet (if you don't want to spend extra hours grinding on lower level pets) would be to find a max level buddy, team up and have them escort you around Pandaria since you won't be able to find level 25 wild pets to battle elsewhere.
- Level 25 battle yielded 83000 player experience
Note: I haven't tried Pet Battle PVP to see how much player experience you can get from those.
Next I did some Pet Battling on my level capped druid. Much like the player experience mechanic, Lesser Charms from Pet Battles follows a similar guideline:
"Level-capped players will now have a chance to earn Lesser Charms of Good Fortune after winning a pet battle versus a pet within 5 levels of the highest level pet on their team. Higher-level pets will offer a better chance to earn a charm."Keep in mind that this time, rather than simply "highest level pet", it specifically states "on their team". So if you have a team of level 19 pets and you attempt to farm some Lesser Charms from level 25 wild pets, you probably won't receive anything. However, if you have a team of two level 19 pets and a level 20, you will see some results (from a level 25 battle).
I did a total of 10 wild battles in the Vale of Eternal Blossoms, and I received a total of 12 Lesser Charms of Good Fortune (all of them were successful battles). Specifically, 4 charms on the 5th win, 3 charms on the 6th win, and 5 charms on the 8th win. It would appear that the number of charms you can get per win ranges from 3 to 5, but I haven't done extensive testing yet, so the range could be even bigger.
Capturing or defeating the entire team doesn't seem to have any affect on how many charms you get or if you receive any at all. I trapped a rare on the 8th battle, but again, I haven't tested it enough to determine if capturing pets will yield more.
Quality of pets also doesn't seem to have an affect on what you receive. There were multiple battles in the Vale where my team was up against a wild team with a rare pet in it, yet those engagements didn't produce any charms at all.
Note: I haven't tried Pet Battle PVP to see how many charms you receive or how often you can get them. I would guess that it's about the same droprate, though.