(oops, you asked this on the list. FWIW:)

Doug Way <dway at riskmetrics.com> writes:
> I'm probably missing something obvious, but how are these levels

Hi Doug,

off the top of my head: the moderators are a rotating group chosen
semi-randomly from the membership. There is a scoring system called
"slashdot karma" which tries to weight this towards more active and
respected posters. If you create an account and use the site for a
while, every now and then you'll be allocated 5 karma points to use
for moderating comments as you see fit.

there is also meta-moderation -

 "What follows is 10 random moderations performed on comments in the
 last few weeks on Slashdot. You are asked to honestly evaluate the
 actions of the moderator of each comment. Moderators who are ranked
 poorly will cease to be eligible for moderator access in the future."

more at http://slashdot.org/faq/

-Simon