And regarding Level 4's: here's a post from me from earlier this year on what that does and doesn't mean.
UPDATE: I was going to do a separate post on how the bouncing among Level 1,2, and 3 doesn't mean much, either, but it's perfectly captured in this from the T&G article:
Lake View School in Worcester, for example, dropped from Level 1 to Level 2 this year. Ms. Boone explained that as a small school, shifts in scores of one or two students will have a larger impact than at a larger school. Gates Lane, which also went from Level 1 to Level 2, has a large special education population. Last year the school was able to meet targets for that subgroup; this year, they fell slightly below.Again, Level 1 just means you met your targets and 95% of the kids took the tests. Level 2 means you didn't hit all your targets, as above. And if a few more schools did better on their targets, it's not hard to fall into the bottom 20%, making you Level 3.
It's a chart, and people like charts. There isn't a whole lot behind the chart, though.