Heres the way it works for those who don't know:
Random droppage of rupees, bombs, and arrows.
For every 200 rupees, you go up a zone, until you reach the night sky
For every 300 rupees, a heart container will drop, and its up to you to catch it. You cannot have anymore than 16 HC's, so once you get 16 no more will be dropped.
Every 500 rupees, a fairy will fall down healing you completely. But it will not always show up on the screen
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When going to level 3 and byond, you will face silver arrows and bombs instead of normal ones, which inflict 2x the damage.
When going to level 5 and byond, you will face golden arrows and bombs instead of silver ones, which inflict 3x the damage.
When going to level 7 and byond, you will fireballs and whirlwinds instead of weaponry, which inflict 5x the damage.
If you collect 1500 rupees, Link will be in a blue mail which cuts damage in half
Screenshots
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Enjoy