I'm just curious, has anybody stayed at level one throughout the entire game? I did that in
Oblivion to prevent NPCs from getting killed, and with
DawnGuard, having vampire fledglings attack cities instead of vampire masters could prevent any casualties, since the guards would probably beat them down. I wanted to play as a paladin type character at one point, but found it too difficult to dodge the myriad of daedric quests, but staying level one would prevent half of them from starting and the others could be easily avoided - even during the main quest, you can just steal the items you need from that one guy up north.
It might be difficult, but on lower difficulties, I think it would be fine.