anyone actually know what the criteria are for the venders to refresh their books? is it game time, level or something else??
The first time you speak to a character after a levelup.
E.g. you've spoken with Arhu, setting his inventory, and go out and adventure some more. Then you level up. The next time you talk to him, his inventory is restocked based on your level, while keeping all the items you've sold to him, and that will remain the new inventory until the next visit following a levelup.
(This allows one to save immediately before talking and rerolling inventory, so somebody really tired of e.g. the random skill books can generate the inventories as many times as they want per level by reloading until they get what they want --- unless they want one of the skills that don't show up at random on vendors.)
The levelup in question is tied to one of the two main characters, IIRC the one that is to the right in the panel when you design main characters at startup - other characters' levels are irrelevant.
