Hey everyone. I'll tell you my experiences with ELO and my outlook on how it works (and how it is generally planned to work, based on the system).
I'm 23 years old and a competitive gamer since I was about 14 years old, playing old korean MMO's and MMORTS's. To this day, I still play competitively in every game I play (which in this time's case is WoW Cataclysm). I'm a rank 1 gladiator in 3 seasons as a warrior.
It is true that this game has its imperfections which most of you will blame matchmaking. The ELO system is the most convenient and "simplistic" way to balance the spread of player skill. Does one's playstyle gaurentee an accurate reflection in ELO? Maybe, but not always. There is a reason that the players that some may idolize and top competitive gamers are always around the top ratings. In fact, most players that I've played with that are around the 1800's and above generally have the same ideas in mind in terms of what is good, what is bad, etc.
Your definition of good and bad can be very different. For example, I know some players say (within about 15 minutes of the game), "Man, the score is 13-6. That's really good. We must have a very strong team, let's just keep this up and don't ever let them catch up." But for most players in the top ratings, "It's 2-0, 15 minutes into the game. We are in extremely good position because our carries are pulling ahead in kills, plus denying lane time to the other team's carry which further puts them further behind in creep kills, and therefore puts a strain on the teams overall DPS output/TANK potential." In some situations, an early 2 kills means the end of the game. Believe it or not, most high level games have very very low kill/death stats early game.
In contrast, I've been in all kinds of Elo and played with all those tournament players. My friend, who is "good" but doesn't really think about the meta game concept, sunk himself into the 1026 rating. He then quit and gave me the account to play. I queue'd with one of my friends who was 1300 rated, and I would play my best carry every time. It wasn't even close. Even when one of my teamates were AFK or seemed like they didn't have a clue what they were doing, I would simply tell them (nicely and not condescendingly) what to do. I won 14 games in a row without losing and boosted my friend (the one that I queued with) into the 1550+ rating.
So, based on what I observe and countless games played, I will do my best to lay out descriptions of different level play and ways to improve. Maybe you could even find yourself in one of these spots.
1000-1200 rated: Players in this rating are generally lacking a level of skill that it requires to compete effectively. Whether it be the inability to read situations (such as knowing when a gank is coming your way and what to do), or even failure to realize the importance of accomplishing objectives (killing towers and the importance of doing so, possibly leaving your lane to help gank and push an adjacent lane, etc.), these are all very basic strategies. This is not limited to the ability of the player to effectively use all skills of their champions, or even summoner skill use.
1200-1475 rated: Players in this rating are generally efficient in their use of skills (laning and controlling their characters). Their ability to comprehend "ok this guy is missing and he might be coming to my lane" makes them less susceptible targets of feeding, as well as the basic idea of gameplay (getting the lizard/golem buff, killing baron/dragon, killing towers) makes the game run as the game is intended to be played. Players will make mistakes, probably run into towers to get kills (and getting killed), encourage the team to get together and push, etc. Some players in this rating are exceptional in which they may feel they do not belong in that particular rating, but later I will explain some possible reasons they stay in that rating.
1475-1825 rated: Players in this rating are GENERALLY experienced with some type of high level play. They understand that the team needs a jungle for double solo, ganking is important, getting dragon and forcing team fights is a common strategy, understanding that any action may be punishable (pushing a tower early game when the enemy player leaves the lane to help another), too many player kills early can throw off the game, wards are needed to prevent ganks and to catch players off guard, etc. Clever play is often seen in this bracket, players use their skills in creative ways to their advantage. They use just about every tool in their toolkit to help shape the outcome of any battle. They know the importance of fighting as 5 and how the little things in the game can become always change the game. Their knowledge of builds are sufficient to adapt to other team skills. A summary? Players are skilled, they know how to play.
1825+ rated: In high level play, it is all about the big picture. Players constantly asking (maybe not consciously, but by nature it is their thought process), "what will happen in 5-10 minutes if I do this?" It's about the BIG PICTURE. A carry gets first blood in a level 1 team fight 1:30 into the game. That's about 355 gold. Think about how many creeps you need to kill to match him now. What if he gets another kill? That's about 600 total. His gold per minute has then skyrocketed, and whoever he is going against will now feel pressured to keep up constantly. What if that team also gets Dragon? Especially if its not warded, the other team is then screwed. Now just imagine that alone, without the ganking and outlaning and possible pressure that the support may be putting on the enemy jungle. Dragon + 2 Kills + First blood, along with those 2 deaths being punished by time inactivity and the length it takes to walk back. Even if the score is 2-0, the carry now has 790 gold and a very big exp lead, in addition to his opponent being dead for at least 40ish seconds, and time running back for 2 deaths. Does that sound like a situation you would like to be in? In High level play, kills are hard to score and not the main focus in the match. It is about pressure and the big picture. Looking at how much cs the enemy jungler has to figure out when he is going to gank. Warding everywhere just to make sure your players don't get ganked and caught out of position. Knowing enemy playstyles to predict their actions. This is all a part of high level play. Players think down to the mechanical level.