As of an update to the Xbox 360 operating system users can now give games a rating of 1 to 5 stars, which are then averaged across all users. At present too many games are rated way too high, mostly because everyone is inconsistent as to what any of the 5 star ratings mean. I decided to define how I would use this rating system, using 3 to 5 stars to indicate how good a game is. This way, rather than just one "this game is awesome" rating, you can compare one good game against another (at least in my ratings). Here are my definitions:

5 Stars - Outstanding: This game is among the best of the best.
4 Stars - Very Good: This game is better than most, but a notch below Outstanding.
3 Stars - Pretty Good: This game is good, but has a few issues.
2 Stars - Mediocre: This game is ok (perhaps only for fans of this game-type).
1 Stars - Bad: This game isn't worth my/your time or money.

I hope never to have any 1-star games in my library, and it is rare that I will play any 2-star games. Levels of goodness make sense. Levels of badness don't. That is why 3 is not an average for me - it is the beginning of goodness. Therefore, most "good" games will get a rating of 3 or 4 stars, and only a small select few will obtain a 5-star rating - as it should be.

PS. The easiest way to rate a number of games is through browsing the Game Marketplace. This way you don't have to have the game loaded in the X360 tray.