It's a way to help gauge someone's tenure and contributions to the site vs. straight post count... I still need to tweak how these are calculated and what those calculations are based on, but it'll be a combination of:
Tenure
Post count (in the main discussion areas, not off-topic forums, etc)
Likes received
Overall activity (frequency of visits, posts per day, etc)
Right now it's ONLY 1 level per 100 posts and 365 days registered.