I've googled and grep'd the core DAT files and cannot seem to get the LEVELUP trigger to fire. It seems that others have had similar problems. I'm curious if anyone has even got it to work. In the meantime I'm using a trigger on kill to simulate the behavior and using a statwatcher and a stat to store the last level so that it doesn't fire more than once per level, but it isn't as nice as a true LEVELUP trigger. Note that I'm referring to a trigger with :
<STRING>GAMEEVENTTYPE:CHARACTER
<STRING>SUBTYPE:LEVELUP
I've tried a bunch of settings but nothing has yet caused the trigger to fire.

Yeah, me either.  Not saying it's not possible.