First of all, the ps2 rankings are a bit slow on the update. I can't speak for XBOX, but usually my true ranks are caught up by the next morning.
As for how the ranking system works, it's based off wins vs losses and frequency of play.
Someone with 1 / 0 will be lower than 1 / 2 even though they've got a better win percentage, but the other has the same amount of wins, and has played more.
Hope this helps.

On PS2 It definately seems to take longer to update the W/L.
Just keep playing and it will eventually catch up. As stated in the previous post the more you play and the more you win the better your rank will be.

i dont think a lot of my matches registered, because i let it sit for days without playing and it missed about 10 matches, then i played a guy 3 times and it updated right away. somethings wrong here. but other than the ranking system online is great, ive only had one match with lag.

Well, that is gamespy for you. It has not recorded like 10 games for me. I'm just mad that people even bother to play online with a 0 out of 4 star connection speed. I'm glad mine is 4 out of 4!

isnt your own connection always like 4 out of 4 stars
everyone body elses star is how much is connects to yours

i was 97-70 and the tomorrow i was 201-122
4 star connection

the 1 or 0 stars are that to you. It could be because they don't live in the same state/area as you. For example... I live in California and have good ping's with other cali's. But there will be low pings with people on the east coast.

The whole ranking system stinks really bad. At one point my record was 190-85. I played this guy who was 78-145. He was ranked better than me(by a thousands points)..LOL! The whole system is messed up really bad. I don't think they will ever fix the problems. They said they weren't expecting such a huge amount of people playing online....guess what.....more people are connecting each and everyday. I wish gamespy would admit to their crappy servers and mkd would go through another internet service.