from the Official Thread of The Last Story
The way the game is paced and structured, with carefully planned encounters and no randomness at all, the designers pretty much knew how strong you'd be at each encounter and balanced them accordingly. Also, with the way the levels and EXP scale, a party member ten or fifteen levels below the main character will be up to snuff after one or two encounters, and always in time for boss battles.
It seems there are points in the game when you have several missions available and are free to choose which one to tackle first, but those are balanced accordingly as well from what I've seen. You're free to grind if you wish to do so, by using summoning points or visiting the arena, but that hardly has any effect on the difficulty of main story missions.
In that regard, Last Story is pretty much perfect. It feels really, really similar to Mass Effect 2 in many ways I think - except it has much more loot, and much cooler weapons and armor. I still very much prefer Xenoblade for the great environments, exploration and overall design, but I think many people, even those who normally wouldn't enjoy JRPGs for more or less valid reasons, would have a lot of fun with Last Story. Those two games are pretty much polar opposites in any way (except for the loot, and the fact that they are two of the most competent Wii titles), yet they both differ from JRPG cliche very much. One is basically a single player MMO, while the other is very streamlined - like I wrote, a Japanese Mass Effect. And both rank at the very top of this gens JRPGs, in my humble opinion.
Oh my... it seems that The Last Story is everything that I hoped it would be. And now I understand why I didn't get interested in Xenoblade at all, those Final Fantasy XII vibes that the game has with that "Offline MMO system" thing is not something that I'm particularly interested in seeing again in a RPG (I can understand why people enjoy that system though).
XII was so boring to me, thank god I didn't bought the game when it was released. And well, if The Last Story is released over here I'll be sure to get a Wii in the future for sure along with other titles.
Also, I hope that both games don't get stuck in Europe... my feelings are still hurt thanks to Nintendo of America for not bringing Another Code: R to America. :(