Some additional details from Pohsyb, the City of Heroes developer who appears to be behind this feature:
Here is the gist of how this works, when players enter the leveling pact (level 5 and below) their experience is all flattened to whoever was the lowest. Any incoming experience to any member is effectively split by the member count of the pact (which we are limiting to 2 initially). From that point foward, all members will have the exact same experience and always be the exact same level. If player A logs out and lets player B do all the work, it will take player B twice as long.
The reason I wanted this is because I've started other games with a group of friends, only to have our tight-knit party fall apart because of differing levels of commitment. I imagine I'm not the only person to create an alt for every combination of friends. Hopefully the 2 person pact won't have any serious problems and we will be able to expand it to full team size.
This is another feature focussed on pushing people to repeat the same content by making new characters. It is also another feature that rewards people who are not even online. It would seem to make more sense to spend that time creating actual new content or things that make being online and playing the game fun enough to want to be online.