At the end of First Blood each player gets 1 additional experience point regardless if they win or lose.

Now this XP is used to "buy" new skills to upgrade your characters.

The question is after the second encounter a player gets a further XP (a total of 2) can a player allocate the XP points across any skills in the Heros class cards or once a new skill is chosen that skill is kept for the duration of the campaign?

similar question regarding the overlords cards. Once a level 1 card is chosen is the XP point allocated exclusively to that card or can the 1XP be used against a different card in a future quest?

Once XP is spent, it's spent for the duration of the campaign. It can be saved up over the course of many quests in order to buy more expensive cards, but once spent, it's gone.

I believe there is one quest in the Shadow Rune campaign where the Overlord's reward for winning is the option to "respec" by removing any cards he once bought and re-spending his XP as he sees fit, but that's an exception to the rule.

I think there's also a hero in the Conversion Kit whose Hero Ability involves selling off class cards to buy others.

But, in general, you can't do it that way. =P