There are good and bad options to both systems.
The best way to do it, IMO, is to:
1. Leave character level as it is. Heroic level + Epic level.
This will ensure even treatment of both people with destinies and without them.
No segregation. Your level is your level. Plus, this is the simpler, easier to understand format. Everyone can be level 25, instead of non-destinied folk being perma-stuck at 20.
2. Remove the XP penalty completely for levels 20-25.
This will once again even out the playing field, promote grouping, and open up a lot more options for enjoyable game play. Plus, now you have a reason TO TAKE the levels, not a reason NOT TO.
Can anyone think of a reason why this wouldn't work or come up with a better solution?