Here is a small explanation from vBulletin:
"User Reputation in its simplest form is a ranking of your user's benefit to your forum. Its basis comes from the opinions of all of your forum users that choose take part in it.
Users gain and lose reputation based on how their posts are scored by other forum participants. Users with the ability to affect reputation, will either give or take aways points by approving or disapproving with a post's content."
A few notes here:
* Nobody on BFP can leave a negative reputation except for the Admins or mods (I doubt this would ever be used)
* Every user starts out with a level '10' reputation.
* Your reputation points determine how many points you give to someone when you "rep" them.
* For every year that you are a member, you get a rep point.
* For every 1000 posts, the user gets 1 rep point.
* For every X points of reputation, users gain 1 point of reputation-altering power. (meaning, if I have 200 rep points, then I can give 2 points to a user by repping them)
* Users must have 20 posts before reputation hits count on other users
* Users can give unlimted rep comments over a 24-hour period.
* Users do NOT have to spread rep around between other people before repping the same person.
When we started looking at the rep system, we wanted to make it be much less about how many points a person had than the communication that comes with it, hence unlimited reps
I apologize for being late in providing an explanation of how it works.