I recommend picking up a copy of the ANA Grading Standards for United States Coins. It provides both written and visual guides on how to grade. Darn handy to have around, as I'm sure most will say. Anyhow, here are the categories (from worst to best): About Good (AG) Good (G) Fine (F) Very Fine (VF) Extremely Fine (EF or XF) About Uncirculated (AU) Mint State (MS) There is also Proof (PR), but this is used for a separate category of coins. These are often accompanied by numbers on a scale of 1-70, with higher numbers indicating higher quality.
If you're just starting out, perhaps you should borrow a book from your local library, or use a reliable internet source for initial grading. A top-tier TPS, PCGS, has published a photographic grading guide for certain series of coins on the internet. That's certainly worth checking out, because 1) It's free and 2) You can see pictures of the coins to correspond with their grades. It's not the end-all and be-all, but it is a good place to start. If you do borrow a book, the "Redbook" is a decent beginner's guide. If you're looking for an advanced guide, I would also recommend the "PCGS Guide to Grading and Counterfeit Detection."
craigm....this website may help you out as you learn more about this fantastic hobby. good luck!! http://coinauctionshelp.com/US_Coin_Grading_Guides.html
