Old passwords will work now, should have thought of that before really!
Countries rating system: The less populous the country, the higher the level. The formula used to generate the 'points' is intentionally shrouded in mystery, but it isn't just to do with how well your pieces have been rated. You can in fact accumulate points without posting a single piece.
Lowest level is Russian,
2nd USAian,
3rd Brazilian,
Australian, Indian, Colombian, Swede, Japan (you've no idea how long I searched for the word that means a Japanese person), and New Zealander is the highest level currently achieved (by the great InTheCafeteria, no less).
Rating of pieces: Basically, when commenting you rate the piece according to the criteria that will be revealed when you click the link below the comment box. You can choose as many or as few as you like, according to the nature of the piece. If you really like a piece, say it's A*-worthy, you OMG it by clicking the link on the left of the Writer's Commentary box. Choose a slot to put it in (the implication is that the pieces in those slots should be your favourites of the moment), the piece that was in that place is displaced, and the one you are OMGing put in its place.
The higher your level, the more OMG slots you have. You have one OMG slot when you reach the second level (USAian).
I also believe your ratings might count less towards the piece average if you're in the lowest levels. That might not be implemented yet though...