I could be wrong on this. Let me state that up front. However, it seems to me that with the standard FUDGE rules, a combatant even one level higher than another will almost ALWAYS win.
Also, with the death spiral for wounds (though I know this is always optional), a few hits and you are in big trouble.
Is that a fair reading of things, or am I missing something?
This is something that has kept me from running FUDGE as written for years. Though I love the toolkit idea of FUDGE, I like a little more variability in combat.
I could be very off base on this and this is no criticism of FUDGE. Just a chance for me to get some long desired clarification.
I use a Willpower / Constitution / Whatever roll to decrease the wound penalty. This way the death spiral can be endured a bit.
Also Fudge Points could allow you to ignore wound penalties.
That one level makes a very, very big difference, yes. However, there are other factors that are just as big, such as numbers - two people one level below a character are going to horribly outclass them together, and when you combine shifting of groups with stances, indirect combat actions, etc. it can all get very variable.
The [-] die.