A word or two on my personal rating system. I rate films from zero to four stars. I don't use half stars, because to me it makes things unnecessarily complicated, and, as Don V stated about the percentage system, makes filmwatching oddly mathematical.

My system is as follows (with examples, I've tried to choose one from each decade when possible)...

Four stars marks a film of outstanding and lasting quality, a milestone in cinema history, remarkable for such aspects as direction, writing, acting, cinematography or some other aspect of filmmaking technique.
Examples: The Cabinet of Dr. Caligari (1919), Battleship Potemkin (1925), Duck Soup (1933), Double Indemnity (1944), Vertigo (1958), Weekend (1968), Taxi Driver (1976), A Short Film About Killing (1988), American Beauty (1999), Gladiator (2000).

Three stars indicates a film of excellent quality, but cannot be given four stars due to a lack of cinematic importance, or the film is simply too much of an acquired taste to be classed as a wide-appealing masterpiece; or, on the other hand, a film worth seeing only for historical reasons. It can also be interpreted that three stars indicate three strong, unrelated reasons for admiring a film.
Examples: Easy Street (1917), Bringing Up Baby (1938), Laura (1944), All That Heaven Allows (1955), Goldfinger (1964), Medium Cool (1969), Eraserhead (1976), Full Metal Jacket (1987), The Shawshank Redemption (1994), Batman Begins (2005).

Two stars is a generally entertaining or engrossing film of high production values; perhaps an underrated small feature or an overrated classic, or even a provocative film deemed too gratuitously controversial or limited in its audience appeal.
Examples: The Floorwalker (1916), Un Chien Andalou (1928), Chickens Come Home (1932), It's a Wonderful Life (1946), Limelight (1952), Lolita (1962), New York, New York (1977), Paris, Texas (1984), Star Wars Episode I: The Phantom Menace (1999), Snatch (2000).

A one star film marks either a watchable second feature or a disappointing film which should have been better, if it was to be made in the first place.
Examples: Midnight Patol (1933), Deux Hommes dans Manhattan (1958), Peeping Tom (1960), Live and Let Die (1973), Made in Britain (1982), Fight Club (1999), Mystic River (2003).

No stars indicate a totally routine production or worse: they may be watchable, but no merit is to be found in doing so, and are at least equally missable.
Examples: Police (1916), Midnight (1934), Pollyanna (1960), Soldier Blue (1970), Annie (1982), Armaggedon (1998), The Butterfly Effect (2004).

Why do I rate films? Well, a friend of mine, who's been watching films for many years, rates them by colour, for personal preference, in his film log: red for his favourites, green for watchable, average films, and blue for stinkers. A very simplistic system, but one which brings personal preference into it more than anything.

I only rate films as a means of recommending them to other people. As long as they know what I mean by the stars, and not what they assume them to mean, it's an effective system. But in all honesty, I prefer the actual review of the film more than any amount of stars. That's why, in the reviews I write and post, you don't find any star ratings in them. Just like Time Out and Sight & Sound's reviews, which are the best you can read in terms of critical analysis. If I wrote a review on every single film I've ever seen, I'd do away with stars. But until then, this is the only way of keeping personal track of what films to watch and not to watch.

Thanks for reading,
Mick