Before I start reviewing things (i.e. The Golden Compass, which I saw today... full review to come), it is important to understand how I evaluate things. For the purpose of this explanation, I will relate everything to movies since that's probably what I'll review the most, but the same criteria will affect other media as well.
I reluctantly rate movies on a 5 star scale. I normally don't like this because it is impossible to sum up the quality or appeal of a movie in a number, but I think it does help to give people a basic idea if they only take a quick glance, and also as a word-free summary of my opinion of the movie. I try my best to evaluate movies not just based on my own personal taste, but there will always be disagreement about every movie, and I readily admit that my opinion is really no better than anyone else's. Also note that if two movies receive the same rating, that does not necessarily mean that I think they are approximately equal in quality.
The following is an explanation of what my ratings mean. Each section will close with examples of movies that fall into that range so you get an idea of how I classify them.
1/2 star: I always give movies at least a half star just for existing. Unfortunately, the appeal of some movies goes little farther than that. While some people will like some parts of half-star movies for some reasons, they are movies that I would generally classify as "bad." This is rare in my evaluations. Examples: Pearl Harbor, The Omen (2006)
1-1.5 stars: Movies in this range usually have some kind of undeniable appeal, but as a whole, they tend to be below average. While some people would defend them to the bitter end, these films do not stand out above the rest. In some cases, movies that have a good concept but fall short in execution would fall into this category. Examples: Signs, Star Wars: Episode 1, Legally Blonde, The Fountain
2-2.5 stars: These movies are what I call "average." What I mean is not that they are necessarily mediocre, but simply that they are, at best, on par with what is typical. Therefore, I put a lot of movies in this range. This includes movies that even I would call good, but that don't do anything to push their genre or to stand out in general. Fans of the genre will probably appreciate these movies, but they are not for everyone. Examples: Crank, Wedding Crashers, The Wizard of Oz, Unbreakable
3-3.5 stars: If I give a movie at least 3 stars, then I think it's good overall. Typically, they are movies with a lot of potential but that have noticeable flaws or don't live up to their potential. While they may not be for everyone, it is usually safe to say that they are well-made overall. Examples: Spiderman, The Golden Compass, Star Wars, Shrek
4-4.5 stars: These movies are what I call excellent. Although obviously not everyone will like them, it is very hard to deny that they are high quality films, or that they are notably exceptional within their genre, usually both. The typical reader can consider the 4.5 star rating as my effective "5 stars" since I almost never rate a movie 5 stars. A 4.5 star movie, and to a lesser extent the 4 star movie, is the top of the line, just not the very highest peak. Examples: Gattaca, Life of Brian, Spiderman 2, Saw
5 stars: This rating is reserved for what I think are the very best movies. Although no movie is perfect, and I can go on and on about the flaws of even these movies, they truly stand out to me as the top tier of films and filmmaking. Kudos. Examples: The Fellowship of the Ring, Memento, The Godfather