Level Zero: Deck with no coherency. Also, lack of any sleeves. Very(hopefully) new to the game, and needs explanation on several basic rules. Equal of the online MMO Newbie. Tends to become level One/One point Five VERY quickly. Quite fun to watch become good players.
Level One: Deck with Coherency/Combos. At this stage, still lack of sleeves. Decks still tend to be bad in many peoples eyes. Decks based off of Structure Decks, or Structure/Starter decks themselves are this level(though deck power usually lets them beat quite higher level players. Thanks Konami)
Level One Point Five: Level One, with deck sleeves. One layer, usually over-sized, but not always. Knows the basic rules by heart by now, but still is oblivious to other decks. May take a while to become level two.
Level Two: Full deck coherency. Things like Alien decks without any random stuff like Marauding Captain. Still without a tournament valid deck, but now capable of playing a few games before dropping in tournaments.
Level Three: Double Sleeves/Triple Sleeves. Also, a secondary deck or even tertiary deck, with different play style. Begins their Collector Album. First few "Power Cards" such as Natural Beast/Palkion, Archlord Christia, Caius the Shadow Monarch in 3s, etc, are used. Character Sleeve Users are usually at least this level. Clear Giveaway: Pro-Storm. Strongest indicator of at least a level 3 is Pro-Storm. Level Threes tend to also use Pro-Storm a LOT after they figure it out.
Level Three Point Five A: The Collector. Complete offshoot of YuGiOh that I am not personally concerned about, but they have impressive files. Tend not to go up in level anymore, but not unheard of.
Level Four A: Depending on the player, may retain their double/triple sleeves, or move to four or five layers. Independent of this, player creates their first "Tier One/One point Five" deck. Now knows the funny rulings that makes no sense about their cards. Possibly "flawed" deck lists, lacking in money cards such as Lightsworn Magician Lyla, Blackwing Armored Master, Dark Armed Dragon, etc., but not necessarily. Knows what a damage step is.
Level Four B: The Innovator. More or less identical to the Four A, except for the fact that this level makes the Tier One point Five decks. Uses only one or two sleeve layers, for reasons unknown. (really. biggest trend in all of this level)
Level Five: Player now has decks with up to six or seven layers of sleeves, depending on the user. Now has completed their "Tier One" deck, and knows the rulings on all/most other cards. Also now uses rules to their advantage, for example, SEGOC. Character Sleeves are almost unheard of beyond this level. Knows the damage step's sub steps.
Level Six: Player makes their deck the highest rarity possible. Expect no Rare Stratos, Super Rare Stardust Dragon, common Destiny Draw, Common Call of the Haunted(Monster Reborn is a bit of an exception, since Gold Rares tend to be on equal par with Ultra Rares in this level in terms of "shininess".)
Level Seven A: Player now makes his or her deck into all TCG. If possible, English First Edition Maximum Rarity.
Level Seven B: Player prints his first playmat. Most of the time, its not well done, and very pixelated(on 2ch we dont have a Playmat design thread, because we dont have a PJ.), and self designed.
Level Eight: Owns a Konami Created playmat. Very well may have gone to the tournament and won it his or herself. Has a full TCG, Maximum Rarity, First Edition, Well protected deck. Long story short, don't expect to win often unless your level is there with them.
Peoples playstyles and reads are not necessarily bound to these levels. Also, this list gives just the biggest indicators, not all of them(because most of this assessment is subconscious)
This is what I more or less use in assessing players within the first turn/before so, to determine how good a player they are, and what kind of reads they will pick up or give. The levels determine their PLAYING and Strategy/Planning, not how much time spent, etc. Hence the collectors are level three point five.
Higher level does NOT necessarily mean better.
Chances are that most National Representatives at least play at a level seven.
Applicable almost only to Japanese Areas(since TCG decks in Europe SURE dont mean your level Seven.)
To be honest, I'm probably Five. Your mileage may vary. Majority of duelists will be around Four to Six.