Im a PS3 guy, just got 360 not too long ago. I haven't played a lot of games. (XCOM is amazing) I never paid it any attention until I went to xbox.com to sign up for the rewards thing. I have a 3 out of 5 star rating, does Microsoft think I'm mediocre by default? I'm sorry I opted for the 4GB version Microsoft, but it looks like you've suckered me into having to buy your severely over-priced officially licensed "320GB Media Harddrive" (a.k.a. "regular 2.5 inch laptop harddrive in a plastic shell") [of which only ~296gb is usable, pre-formatted. And that's before you install the 6.7 gigabytes of the complimentary Lego Star Wars 3, which sucks a fat ugly baby's asshole] because the loading times without one take longer than a 6 month prison bit.
Now I know it's probably because I just haven't received any rating votes yet, as I have played even less multiplayer. I wonder though, why do I start out as the regular Joe Schmuck asshole? Does everyone start in the middle? This got me curious enough to try to find the official rules from Microsoft. Didn't get far. A quick search on xbox.com for "rep rating" turns up forum posts of people bitching about those who will give you a bad rating just for killing them too much in Halo Duty. Normally this wouldn't matter because who really gives a shit, but what if it's taken into account for something like matchmaking purposes?
Of course people will use the rep system to send negative votes much more often than positive, that is just how people are. In particular all the young pricks on xbox live I've always heard folks complain about. If the system is so obviously skewed, why not scrap it outright?