Your Pokemon walking will gain one exp point per step, and will earn up to one level per stroll. However, your Pokemon does NOT gain new moves by leveling up this way, nor do they evolve. If you're a stat nut I'm not even sure the Pokemon gain EVs.
It really seems like a great way of leveling up those pokemon you want to get their evolutions but don't care so much about them, say Hoothoot to Noctowl. It may not evolve in the Pokewalker, but you can get it to Lvl 19 and almost all the way to Lvl 20 then quickly level it up in game.
Yeah, but doesn't it only level up one level at a time? I mean, you can't level up more than one level no matter how long you have it in your Pokewalker. You have to transfer it back to the game once it goes one level, then transfer it back. Is that true?