A five star rating has always made sense to me, it implies the best of something, however what does a four star rating really mean, and how do you distinguish the difference between a four star and a five star album/book/film?
I think Halliwell had it right. Leslie Halliwell was the creator of one of the most extensive guides to films, you can buy 2 inch thick books of film reviews each year that review and rate the film 'that matter' from the previous year. By default all films received no stars, and then depending on the quality of the film the star rating would increase. A film that had no starts wasn't unwatchable, however it would just make the point that there was nothing really special about it.
Personally I want more control over saying if a film is unwatchable or not, a random example that I happened upon; the film The Notebook receives no stars in its rating, and I would agree that there isn't anything really special about this film, it is a mediocre film, however to just glance upon the review you have no idea what the reviewer really thought about the film.
So I propose my own system of rating; as with Halliwell things that are getting reviewed start with no stars and then work their way up. A record, book or film that ultimately receives no stars is unwatchable, it is an honour I reserve for things like the 'go-to bad film', mine being Napoleon Dynamite (some people love it, I can't stand the thing).
Awarding one star is more out of sympathy for the thing being reviewed, it is the pat on the head for a good effort, however ultimately failed. It doesn't make the two star rating, however it doesn't deserve to be deemed unwatchable/listenable/readable. I would place Drop Dead Fred into this sympathy vote, nice try, however it is just poor!
Two star gets given to something that see as a bad film, with redeeming qualities, the majority of James Bond films fit into this category; generally rubbish story lines and acting, however with the redeeming quality of well made action scenes and the odd comic one liner.
The three star award is the award for being mediocre, it is an average book/record/film. This category is reserved for things that I sat through, and wasn't really pulled either way, I didn't really like it, however nor did I dislike it either. Three stars would go to a film like The Notebook.
Distinguishing between a four stars and five stars is the hardest one to judge, what divides a good film from and exceptional film? A good film is one that you sit through, enjoy, and afterwards you talk about it and say I'm going to get that on DVD/BluRay/etc when it comes out. That kind of film gets four stars.
Getting a five star award is for films that you really enjoy, you quote it regularly, and rather than saying I'm going to get the DVD you consider going and watching it again at the cinema, your name is on the preorder list and as soon as you get it you clear your evening to watch it. In my opinion films such as The Shawshank Redemption, Watchmen and the new Star Trek all get five stars.