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TrueSkill was developed for the Xbox360 by Microsoft Research.  It's primary purpose is to evaluate a predictable average of a gamer's skill level with a minimum amount of games played.  TrueSkill uses 50 ranks to classify players, and that player's average performance in all ranked games played is roughly their TrueSkill rank.  Games then try to match players together based on this rank.  Unranked games do not contribute to changes in TrueSkill rank.
TrueSkill is available for any game on the Xbox360, but is used most commonly in early 360 or XBLA titles.  Games from major publishers like Electronic Arts or Activision generally use their own matchmaking algorithms.

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