A poorly advertised new feature in iTunes 7.4 is the option to rate whole albums as distinct from individual items.
Rating in general can be tricky, as it’s arbitrary and one rating must necessarily be compared with another in order to be meaningful. Apple could have created 10 stars (and strangely enough with a bit of voodoo, you can rate with half stars) but that’s getting too complex.
Long ago I realised I could only effectively rate songs as they relate to each other on a particular album. It’s hard to compare The Dave Brubeck Quartet’s outstanding Take Five to AC/DC’s Heatseeker because they are so different, although I’ve rated both songs 5 stars. Therefore I have a lot of 5-star rated songs, but some albums I like more than others. This is where the album rating comes in. Spiderbait’s Grand Slam is one on the top of the list, but Bowie’s Heathen, although cherished, comes in a bit below in my personal estimation. Now I can rate them accordingly. This allows me to more effectively create playlists based on the best songs of all time. For example, I could filter 50 songs rated 5 stars but the album has to be rated 5 stars too. This guarantees the truly best songs. Conversely, you could create a playlist that filtered an album rating of 2 or 3 and cause yourself to reevaluate just how you feel about those albums.
Albums are rated automatically by iTunes, indicated by open stars. As soon as you rate one song, it starts averaging all the individual song ratings and applies this to the album. As you continue to rate songs, the average gets more accurate. You can override at any time and select a rating just like you do with individual tracks, by clicking a star, only you do this in Album View underneath the album artwork. This will change the open stars to closed stars, and iTunes will stop averaging the album rating. If you haven’t rated some songs and you define an album rating, it will update all the unrated songs with the same rating, also indicated by open stars, which can also be changed manually.
We can assume that you bought your albums because you liked the music, so it’s also reasonable to assume that there will be many highly rated songs that saturate the top two ratings. This made it hard to identify the truly great songs without this additional rating option.
The Tune Gardener 
I would like to also register my disappointment with iTunes automatically adding the open stars to previously unrated tracks. What stinks even more is that there is no way to filter on open stars so I can’t even find out which tracks had not been rated before
I see your point, but it would be nice if those ’empty stars’ that iTunes adds to unrated tracks could be somehow ignored.
I like to rate just a few standout tracks on each album so that a Top Rated playlist isn’t dominated by any particular artist. The problem I have is that if I rate an album *****, like the Blue Album for instance, I end up with a playlist of mostly Beatles songs. Now I love the Beatles and I couldn’t justify giving the Blue Album any less, but I’d prefer to see just the highlights in my playlist.
I did follow your advice and in the end I’ve just binned my album ratings. It’s a shame that despite the fact that Apple themselves made the distinction between user-generated ‘solid stars’ and iTunes generated ’empty stars’ we can’t use this when filtering our playlists.
“Rating” is “Track Rating”. To avoid unanticipated ratings for tracks, I wouldn’t rate the album unless I manually rated all the tracks. As your playlist is for top-rated songs, it could be suggested that the Album Rating would have to be high too, so you could define it as Album Rating is *****, Rating is *****. You can also ignore the Album Rating altogether and just define Rating is *****.
The main point is that you have to rate both tracks and album if you want the ratings to be accurate.
I’ve been going through adding some album ratings in my library, but I’ve noticed an unfortunate side-effect of the albums rating feature. Now that all tracks in the album are given a nominal ’empty star’ rating, they show up as rated tracks in the ‘My Top Rated’ smart playlist. This annoys me because I like to use this playlist for just the tracks I highlight with individual ratings. I find it odd that iTunes contains separate filters for ‘Album Rating’ and ‘Rating’, but not ‘Track Rating’. Am I missing something here?
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The only low capacity iPod I’ve owned is a 1G 512Mb Shuffle which I’ve always filled with random tracks from a smart playlist. However, my 5G 30Gb ‘classic’ is starting to feel like a low capacity iPod. I find myself knocking albums off this by using the ‘sync only checked songs’ and unchecking the ones I don’t want. In the future, I’ll move to star-based filtering, I hope.
Despite the fact that my 5G is feeling constrained, there’s really no iPod for me to upgrade it to, so I reckon I’ll have to wait. I’ve canned the idea of getting an iPod touch, it would just frustrate me too much.
Yes, that’s a great application for this. I’d be interested to know what people put on their low-capacity ‘Pods. Personally, I put all podcasts on my Nano, then fill the rest with last-added music.
I still buy all my music as CD albums, so for me, this feature is long overdue. I’ve tended to rate only a few standout songs on some of my albums, so the iTunes guesswork is a bit patchy for my stuff. I’ve tried to use the whole scale, because as you say, I bought the album, so I probably like it anyway.
* is for those albums that disappointed me (any of the recent U2 albums)
** for the ones that are decent (The Repulsion Box, The Woods, Takk…)
*** is the threshold for a really good album (Writer’s Block, Doolittle, Nowhere)
**** for my favourites (Van Occupanther, Rainy Day Music, Fox Confessor)
***** for the classics (Abbey Road, Blood On the Tracks, The Stone Roses)
Album ratings will be most valuable when it comes to squeezing your library onto a smaller iPod – a smart playlist with an album rating threshold.