2 questions: 1) Has any commercial games used the scheme where actually using a weapon, skill, or magic power actually raises the level of that weapon, skill, or magic power, respectively? And also the player as well. 2) If yes, can you drop some names because I want to see how implement this. ex (for 1): You use "Phoenix Flame" 25 time on Stage 1 with a good hit rate and therefore now "Phoenix Flame" is now Level 2.

Two games that come to mind are Secret of Mana and Final Fantasy 2 (the latter being the NES game, not Final Fantasy 4 translated for the US).

I tend to not like these systems because, realistic as they are, they tend to encourage "practicing" your abilities to get better at them. "Practicing" tends to mean "grinding", which is boring.

Sure, lots of games have.

Secret of Mana immediately springs to mind for me too. Morrowind and most MMORPGs don't have "levels" but a more direct correspondence, which is used more nowadays. FF7 of course had another version of this with materia.

I personally don't mind grinding if the game is still clearly focused on story and progression. Secret of Mana was balanced well because the caps were mostly reachable during normal gameplay, but it did help to grind a bit right after you raise the level cap.

Do you mean the weapon levels up or the character's skill that corresponds to that weapon levels up?

If it's the latter, yes I have seen games do that, quite a lot actually. Quest for Glory, old PC series, have a "Climbing" skill. The more you climb the better you are at climbing. And this of course encourages you to clicking on the first tree you can climb on until you maxed out your climbing skill.

Wizardry 8 does the same. There are sword, axe, staff, water magic, etc skills. The only way to increase them is to use weapons or cast magic.

Secret of Mana and Morrowind are two examples that spring to my mind and have already been mentioned. There's also Dungeon Siege, a Diablo-like game that has melee, ranged or magic skill increase based on usage. The old Quest for Glory series did the same thing too, with the addition that individual spells had their own skill stats as well as a base "Magic" stat.

Morrowind/Oblivion use this.

You don't earn experience points really. If you want to increase your Axe skill, you have to go swing an axe around, etc... (Then once you've increase a certain amount of skills your character gets a "level up" which increases base stats).

Ultima Online.

I've never liked games like this. It doesn't really make the game more fun, in my opinion, and thus should be avoided.

Helbreath uses this in the exact same way as you describe.

Every weapon type (axe, sword, bow) and several other skills start out with 20% and slowly increase to 100% when you use a weapon that relates to the skill. And when you hit your enemies to gain such skill you also still gain experience to level up your character.

Another game that does this, which I should have thought of the first time, is Disgaea (and, of course, its sequel as well). Every time you land a hit, or cast a spell in the case of staves, you gain a little experience with your weapon type, proportionate to your base aptitude with that weapon (for example, clerics are naturally bad at using swords, so they gain experience with them very slowly). Every time you level up your weapon skill, you get +5% damage with that weapon type; additionally, at certain levels you get new attack skills that use that weapon. Spells and skills also level up from use in the same manner, gaining extra damage/range as they are used.

I didn't mind the Disgaea system so much, largely because the basic story mode is easy enough that you don't have to do any grinding to beat it, while the post-game content is basically all randomized or bonus maps, so you can approach it as you see fit. If you want to get the best possible characters, then you will of course do a lot of grinding (it takes several days of nonstop play to "max out" a single character in Disgaea, and much of that is collecting experience points), but I didn't want to, so I didn't grind.