I've been hard at work on the "2.0 Edition" of Microlite74. Microlite 2.0 has cleaned up rules that are closer to the combat power level of OD&D and with spells and monsters rewritten to be even more compatible with Oe and )e retroclones.
Here are some of the more noticeable changes made so far:
1) Stat bonus is now (Stat-10)/4, truncated (i.e. rounded toward zero).
2) Melee and Missile attack bonuses now use "Physical Combat Bonus" instead of level. Physical Combat Bonus depends on Character Class:
Fighter PCB = Level/2
Cleric PCB = Level/3
Magic-User PCB = Level/4
Round up on all.
3) Hit Points = 6 + 1d6/level (instead of STR stat + 1d6/level)
4) Two weapon rule rewritten to make it clear that fighters using two weapons make one attack roll at -2. The 1.1 version could be read as one attack roll at -2 for each weapon.
6) Monster List is now based on the M20 Hard Core list plus some extra monsters from the 1.1 lists and more old school monsters added to the list, including the return of the rust monster. The monsters have been tweaked to be more compatible with 0e/retroclones.
7) the addition of one point to a stat every four levels (in the Level Advancement section) has been dropped. This just is not needed in a game designed to feel like 0e. Stats aren't that important in 0e and they don't need to increase to make up for higher level OGL20/3.x stuff as they do in standard Microlite20. To be honest, I thought I had dropped this in the 1.1 update but somehow missed it.
8) Spells have been reworked (mainly durations and ranges) to make them more compatible with 0e/retroclones.
9) A list of magical treasures most appropriate to a 0e style campaign has been added.
10) A one sentence rule for what 3.x calls "Attacks of Opportunity" has been added.
If you would like to download a current copy of the Microlite74 2.0 draft rules -- and help proofread and comment on them -- you can do so on our message board in this thread: Microlite74 2.0 DRAFT (Corrections and Discussion).