I bought The Pitt because I reached the 20th level cap on my character in fallout 3. The description said that the game would remove the cap and let me reach level 30. I have been playing the game and the cap hasnt been removed and i havent been earning any experience. Can someone help me and tell me what I need to do so that the cap can be removed??

That's because The Pitt doesn't increase the level cap, it's http://fallout.wikia.com/wiki/Broken_Steel that increases the level cap to 30 and allows continued play after the main quest-line is finished.

Thanks for helping, another question. If i purchase Broken steel would I have to beat the original FO3 storyline game before the cap is removed or would it be removed immediatley after downlaoding?

The cap will be removed right away when you install Broken Steel, but you will not be able to do the new quests from it until you beat the base game again.

Thank you guys, you were a big help!