Dude, is mindreading really worth the loss of XP?? I've heard mention of equipment and quests that can only be found through mindreading, but this game is so damn hard, using up XP slows down level progression. With no enemy respawning (at least not in the beginning) I need all the level ups I can get!! Hearing more opinions would be great, Raze, how do you remember all this stuff???
It does not matter much because of how experience works. The higher your level, the less XP enemies give. Therefore if you do all your mind reading before killing things then the loss will be minimized.
In general to get the most XP:
[Up Mind Reading Skill] -> Mind Read -> Kill Things -> [Up the Wisdom Skill] -> Turn in Quests
(things in brackets only apply if you decide to do them at that point, for mind read the first rank gives a bigger reduction that the later levels... or at least the very next level after it)