I read somewhere that Elys Uncapper, which allows base attribute and skill levels beyond 100, does not work for companion type mods. Is this true?

As far as I'm aware it works on all NPC's, although I can't imagine companions cruising to over 100 for their skills or attributes.

Unless they level with you though right?

When NPCs/Companions level with you they follow the construction set leveling schema which lead to NOT exceeding the 100 cap on skills.
Only the player can exceed this cap using some special levelling mods nGCD, RL, Oblivion XP, Wrye Leveling ...

So what would be the point of using the uncappers then if nothing else levels with you? Eventually you'd be one shotting everything and there'd be no challenge. It would be like putting yourself on godmode. Am I missing something here?

I have always seen these uncappers as pointless game change; it's like in Mathematica: what you think about 1 mm is the same of 1 meter or 1 kilometer it's just the reference point that change. Basically people use these uncappers to get some gain from their skills when they exceed the 100 cap due to some abilities or enchantment items. This is at least what I think.

Personally unless used with a leveling mod that gets rid of the ridiculous x5 multiplier then the Uncapper could seriously be considered an exploit. Of course you'll be godlike walking around with 200 plus in attributes and skills.
It's actually an achievement to break through the normal level cap if it's used in conjunction with mods like nGCD or Realistic Leveling, especially when combined with a skill progression slowdown mod like Bofra's or preferably Progress.
The scenario of companions breaching the level cap then is hardly likely to arise.

I guess another thing I don't understand is that Elys says it works on NPCs as well, yet it doesn't bring their skills and attributes up? Isn't that what a level is about? I'm just really confused here.

For me the interesting part of the Uncapper is the possibility to specialize in some skills (roleplaying) and in combination with ngcd and progress you can set the options so that it will be definitely not overpowered (5x slower leveling, emphasizing on class and birthsign). I think with ngcd and progress everybody could make the game as he wants it to be.

At least I have a lot of fun:-)

I think Elys was talking about NPCs taking advantage from their skills when they are above 100 (nothing related to NPC leveling).
One can manually advance skills of a companion by using the command: setav SKILL #

oh okay, but other NPCs' levels don't actually go up automatically. You'd have to set them up either in CS or like what you said then. Is that correct? I think I finally understand how it works.

Yes
I think the best mod that suit CS NPC leveling is Wrye Leveling if configured to +13 Skill gain and +6 Attributes gain by level
(it's configurable with a cobl option item).

Alternatively there is a very fast way to level manually and at will in the construction set way:

- Suppose you have started vanilla Oblivion with a character level 1 and have taken his birthsign/class
then to go directly to a higher level (say for example level 10) with the same system as CS leveling, you have to do two things:

Open the console and write the commands:

Player.SetLevel 10
Showclassmenu: you dont need here to select another class, just choose the same initial class and click OK

The idea is that NPC skills aren't increased by them gaining experience through use. Instead, they directly depend on the NPC level. If the NPC levels with you (as I understand many companions do), then their skills will just steadily increase with level. I wouldn't be surprised if the formula is capped at 100, but I haven't checked myself. So it's entirely possible that even with Elys' uncapper installed, you won't see NPCs with base skills > 100. With other uncapping mods, it's possible you might.

In either case, an NPC could still raise their skill above 100 with magical or Luck bonuses. If the mod also uncaps the skill use formulas (e.g. makes 'Destruction' skill above 100 continue to reduce spell cost), then NPCs will get those benefits exactly like the player.

In a nutshell: NPCs raise their skills very differently from the player, and an uncapping mod might not have uncapped that mechanic. But NPCs use their skills more or less exactly the same as the player, so if a skill > 100 benefits the player then it will benefit NPCs too.

Also, if a companion uses custom levelling (possibly simulating increase through use) then they will be able to go above 100, provided the levelling script itself doesn't cap it there.

Most of the leveling mods I have used affect only "Bendu Olo" (Player),
the NPCs follow the same leveling system given by the construction set.
At level 55 or 56 their major skills reach the 100 cap and never go above it.

So even with an uncapper and a leveling mod, they still essentially stay stuck at 55/56 even though they are set up to match the level of the player?

Generally NPCs/companions reach the 100 cap in each major skill between level 48 and 56, depending of what skill is a class/specialization or race skill (for example Breton are buffed +10 conjuration, mystcism, and redguards +10 to blades, blunt at the start of the game... etc). They never go further whatever leveling mod you are using especially if it's skill based.
Non major skills for most never go further than 10 for some, and 20 for others.