There's really no XP farming, for once you kill them, they are gone forever.
You should do the side-quests for the XP, and the weapons and armour you'll get from them.
You also need to level up(by doing the side-quests), for the mobs have a set level which will always be higher than you if you don't level up fast enough.
I guess you could go through all the caves and dungeons without any side-quests, but wheres the fun in that?
BTW I just love System Shock 2. Nice avatar there SHODAN!
