I think a lot of people chop and change, as suits their feeling. I stuck with Level 1 for a couple of weeks - the transition from being totally sedentary was tough for me. Had to take breaks because of DOMS.
After that, L2 wasn't all *that* bad, and L3 the same - I did L2 for I think a handful of days before trying L3.
Keep at it, sounds like you're making great progress!
re quick weight gain - now this is a pure junk guess, based on vague memories of something or other I might have read / heard / imagined - is it possible there's some kind of extra water/blood going to (and hanging around) the muscle fibres, given those brand new microtears and changed sodium or whatnot levels?
edit - lol, we've FINALLY got some sun today, I'm giddy. Sorry!
Goal - 135 lbs
April 2011 - 145 lbs
August 2010 - 178 lbs
C25k, DVDs, swimming