Mutant 'power levels' are a considerable source of debate among many Marvel fans, especially fans of the X-men. The system is fairly comprehensive, and it's reasonably logical, but what makes it a topic of much contention is the fact that they are almost entirely fan created and, as something of a byproduct, not every mutant in the Marvel universe is assigned a level. There are seven levels, which I will explain shortly, and every mutant in the Marvel universe can be evaluated as being one of them (more or less). While the definitions of each level can change depending on what source one uses, I did some reading and came up with this basic outline:
I previously wrote a post about the thirteen Omega-level mutants in the Marvel universe, which can be found here. For a character to qualify as an Omega level mutant, only one thing is technically necessary- they have to be officially labeled as such. While this scale itself is largely fan-made, every member of the Omega level has been called such by Marvel, and theirs is the only authority that counts in this matter. Sure, there are actual traits that Omega-level mutants must possess, but they're usually vague at best; suffice to say that they have to be really, really, really powerful and able to change their physical body into another state, like psychic energy. Omega mutants are extremely rare (only thirteen exist in the entire Marvel universe) and are, either by coincidence or design, often telepathic. Some notable members of this level are Jean Grey, Iceman, and Franklin Richards.
This is probably the class that ends up being the most contested, largely because it's made up of extremely powerful mutants, some of whom people will often argue should count as Omega-level, and they consist of roughly 10% of all mutants. Alpha level mutants are very powerful individuals whose mutation features no significant drawbacks. Note that while Alpha mutants aren't notably hindered by their mutation itself, they can possess other extraneous disabilities, impairments, and general encumberances; an example would be Professor X, who, while unable to use his legs (is he crippled right now? His ability to walk changes so frequently I tend to lose track...), is an extremely formidable telepath. Good examples of this class of mutant are Dazzler, Magneto, Storm, Gambit and Rogue (as she is currently, able to control her power-siphoning abilities). Note that this level also encompasses characters with abilities that are considered more powerful than average that have negative mutations, and therefore covers a very wide range of individuals.
Beta Level mutants are pretty powerful beings, but they are minorly hampered by an aspect of their mutation in a fairly minor fashion- think Alpha level powers with a drawback. These drawbacks can be anything from slightly abnormal physical features (blue skin or fur, for instance) to the inability to turn their powers on or off at will. Controversy regarding this class often stems from deciding exactly what counts as a 'minor' drawback- Cyclops cannot turn his powers on and off at will, so some would classify him as beta-level, but this inability is currently stated to be due to brain damage and is therefore unrelated to the power level of his mutation itself (which is what we're measuring here). Beta level includes Beast, Mystique and Nightcrawler, among others. Wolverine is sometimes placed in this level.
A Gamma level has a harmful mutation coupled with superhuman abilities that are above average. Often these mutants are unable to 'pass as human', making it difficult for them to lead ordinary lives. Rogue (apparently) USED to be a member of this category, since not being able to make physical contact with most other living beings makes for a pretty difficult existance, but no longer counts as Gamma level. Some mutants, like Marrow, have pretty minor mutations that cause them near-constant pain and render their appearance inhuman, while others, like Blob, have rather impressive abilities that just make their lives very difficult (he is very morbidly obese).
While their mutations bear no detrimental qualities, they also aren't all that powerful, but Delta level mutants appear, for the large part, to be ordinary humans. Individuals with highly specific powers are also placed in here, along with passive abilities (powers that are more traits than abilities, like Longshot's good luck or Cypher's omnilinguism). These are about 50% of mutants, and cannot, under most circumstances, really hold their own against their more powerful Omega, Alpha, Beta and Gamma contemporaries. Delta level mutants can have many types of powers, like Forge (who has the mutant power of invention (no, I'm NOT making that up)), Loa (who can pass through solid objects, which causes them to break apart), or Wallflower (pheromone control).
To count as an Epsilon level mutant, you have to possess very little to no special abilities and a mutation that extremely negatively effects your day-to-day life. Some mutants of this level are killed by their mutations, like Sally Floyd's daughter, who around a few months of age began growing in reverse. Others have somewhat monstrous appearances, like Glob Herman or Beak. They often cannot function in society without aid, and can even end up hunted down as monsters, like The Worm (he's from District X and doesn't have a page). 20% of mutants fall into this category.
The lowest level is home to latent mutants; humans whose children or grandchildren might end up being mutants but do not themselves classify as such. This level is a bit iffy- in some cases it's stated that they bear the x-gene themselves, but in others they just could have children with the gene. Whatever the case, the consensus is that they do not have 'mutant powers'; they may, of course, have other powers or abilities, but none that would come from being a mutant. Spider-man should technically qualify as a zeta-level mutant.
So that's the gist of it. Thank you to Jeff, who prompted me to write this list.