From
Arreat Summit (most Exp information applies to HU)
1) There really is a +35%Exp bonus when in a party where another player is in the same area and within 2 screens of each other.
2) For each additional person in the game, exp from kills is increased by 50% of the base.
3) Exp from a kill is divided evenly between all players within 2 screens of the kill.
Examples (Quill rat gives 45exp to a char below level 6):
1) Solo in 1-person game gets 45exp
2) Solo in 2-person game gets 67exp
3) Solo in 3-person game gets 90exp
4) Solo in 8-person game gets 202exp (this is verified in HU, but not on the realm)
5) Duo in 2-person game get 45exp each (67 * 1.35 = 90Exp)
6) Duo in 8-person game get 136exp each (202 * 1.35 = 272.7exp)
7) Trio in 3-person game get 40exp each (90 * 1.35 = 121.5exp)
8) Trio in 8-person game get 91exp each (202 * 1.35 = 272.7exp)
blinky99's test confirms examples (2) and (5). As Hflame pointed out, playing in a party only yields less experience if the party are not working together. With a Duo in mind, as long as the faster-killing player is less than twice as fast as the other player, it is worthwhile to stay in the group. In blinky99's test, where one player did nothing, he was better off playing solo. In general, the fastest way to gain exp is should be a Duo that kills equally as fast as each other in an 8-person game.
The +35%Exp bonus appears to provide a reasonable buffer where the inequalities of killing-speed between players in a party still make a group more prosperous than solo. As long as builds are balanced such that the slowest player is at least half as strong as the fastest player then there is no problem with this current method of experience per kill, so I do not think it needs to be changed.