At a guess it's the revamped version of the old red/green bar thingy, coupled to a simple vote counter that allows site mod types to allocate 'ranks' to users... one site I run for school pupils dubs them suitably silly titles like 'Galactic Hamster Third Class' for example.
Not into voting myself, I turned my red/green one off when I found out how - I generally find out quite directly if somebody dislikes me!
If you check at the bottom of each user name you will see a little √ and X where you can add or detract from a users reputation. This is used to rate the specific post and will affect the "Reputation" of the T2W user, it does not affect the yellow star rating system.
Paul is right, the two systems are separate. I'll post some more information soon about how it works (once I've refreshed my memory!), but essentially it's a more sophisticated version of the existing rating system.