It used to be based on this (and I think still is):
Newbie - 0 Posts
Tenderfoot - 1-9 Posts
Greenie - 10-19 Posts
Jr. Member - 20-99 Posts
Full Member - 100-249 Posts
Sr. Member - 250-499 Posts
Hero Member - 500-999 Posts
Bronze Member - 1000-2499 Posts
Silver Member - 2500-4999 Posts
Gold Member - 5000+ Posts
Charter Member - Yearly Paid Membership
So, apart from Charter Member, based on degree of participation which does not necessarily reflect quality of contribution. There's one member in particular who seems to have made his way up the ladder to Gold by doing not much more than replying "nice find" or something similar on hundreds of posts.
I only found out what the member levels meant after I noticed mine had ticked over to Silver one day. I thought maybe I had won the speedboat or the luxury motor home, but the congratulatory email never arrived.