Every session you play you record all skills used during that session and gain one Experience Point (XP) in each of those skills. Purchasing new skill levels require spending XP in the correct skill equal to the level you wish to go to. For example, someone with Pilot (Small Craft) 1 would need to pilot a small craft in two separate game sessions in order to improve his skill level to 2. You cannot skip levels. i.e. going from Level 1 to Level 3 requires 5 game sessions where that skill was used. Always remember the Skill Limits on page 16 of the Core Rule Book. Raising a skill is not required even if you have the XP in the skill. This would be most likely to keep under the total Skill point limit or to save raises for skills that the player prefers to raise. He may still wish to record XP in the skill in case his EDU or INT ever raise and thus his allowed total skill point limit raises as well.
NOTE ON PRACTICING (like gun combat and languages) you normally only get ticks of XP by performing a skill under real conditions. However, some skills may be "practiced" during down times. But you only gain ticks of XP in a skill by practicing with someone who has a higher skill level than you do. Gun ranges are assumed to have software that simulates Skill level 1. Software expert programs may also be used to practice skills like languares. However, anything above skill level 1 requires an actual instructor be present with you.