This is what I have been doing for a while now, I never paid much attention to ratings before but when I started using it, it made a whole lot sense for me and adds a new dimension to the autoplaylist and all the different combinations that are possible.
I rate one cd at a time, start with the 1 star and work my way up to 5
1 Star - Usually songs that I hate, automatic skip.
2 Stars - Songs that I don't like but I don't get upset if I have to listen to it.
Obviously 1 and 2 are not considered anywhere in any playlist but I don't want to delete them since they are part of an official album (my OCD side)
3 Stars - Everything else that is not a 1 or 2, at this point should all be good songs.
4 Stars - Identify the top 3-4 songs as "Best of" (per CD), just like if I was creating a greatest hits compilation.
5 Stars - The masterpiece of the album, it's one of the 4 stars above that becomes a 5 stars. Although I have to admit that sometimes it is difficult. I usually ask myself the question if I had to listen to only 1 song on that album which one would it be... but sometimes I do have 2....
Also I use the grouping field to identify the rating. So for all 5 stars I indicate a "5" in the grouping field and so on. There is 2 purpose for that:
1) if for some reason my rating gets deleted or someone messes it up, I can identify/isolate the proper rating via that field.
2) if I need to use another program that does not recognise/support the rating system, I can also use that field to identify and reset my rating system in a matter of seconds.