Why is BYU a better team than Virginia Tech? Because they performed better in two wins versus comparable opponents (SOS 34 vs. 39) than VT did in a win and a loss. Why is Oklahoma rated better than Alabama? Because they performed better in a win and a loss versus somewhat comparable opponents (SOS 60 vs. 47) than Alabama did in two wins. And yes, winning by 50 makes more of a difference than winning by 23, even with diminishing returns awarded for higher margins, as Sagarin uses. There is currently a very small sample size, and not every team is connected yet (meaning there is a way to link every team to every other team through games played), so there are obviously going to be more flaws in the ratings early than as the season progresses. I'm sure the system also doesn't take into account that, for example, Oklahoma's QB is out the first half of the year, so those results will be affected as such. At this point, even one week's worth of results adds an additional 50%+ of results to the current set of data (since there are at most 2 weeks of results for teams at this point), so the ratings will continue to fluctuate wildly from week to week, even to the end of the season. To me, though, even with its limitations, it's still a better gauge of current results than the human polls, which rarely take actual results into the voting.