The "experience" concept simulates that a player has managed to learn things which improve his performance aside from the main skills.
The players get their experience through playing league matches, national cup matches, national team matches, and friendlies (national friendlies give the players about half the experience an international friendly does).
League matches give a slightly random amount of experience, so you may see some short-term variation in how fast a player's experience increases. This variation is random and not based on the division the game is played in.
Cup matches give about double the amount of experience compared to league games.
There is also a concept called Formation Experience related to a The team's routine with a certain formation.
Every time (here, training matches are as effective as regular ones) your team plays with one of the 6 standard alternatives (4-3-3, 5-3-2, 3-5-2, 4-5-1, 3-4-3, 5-4-1), it will acquire routine with this formation. The team always has the maximum amount of experience with 4-4-2. The team can't acquire routine with formations differing from the 6 standard alternatives, so if you want to use an extreme formation, you'll have to put your trust in your players' individual experience.
If you don't play with a certain formation, routine will decrease over time. A good idea is to always use an alternative, or switch between two alternatives. If you use more, it is not surprising that the players will get confused. Also, anytime you sell a player, you will risk losing formation experience.
A lack of formation experience leads to a increased risk of confusion
The Team Captain:
You can appoint a team captain for each match. When the team's total routine is calculated, all the individual players' experience levels are added. After this, a figure representing the team captain's level of experience and leadership abilities are added. This is the team captain's only function, although it's quite an important one, as he may prevent your team from getting confused due to a strange choice of formation, or getting the heebie-jeebies during cup matches or qualifiers!
The team captain has to be in the starting line up. If you haven't appointed a team captain, the players will do so by drawing lots just before the game.
Other Experience related stuff:
Experienced wingers and forwards can score using their experience.
Inexperienced defenders and inner midfielders can give their opponents an extra chance.