The levels are to encourage participation.

Lower levels need to have their posts reviewed before they go live, however I think they go live automatically at level 5. This is to discourage haters from trying to harm the site, so the site is a welcome and safe place for nonbelievers.

Persons at level 7 and above canjoin the group for input on the site itself to determine which features to add next.

I just reached level 8, and heard level 8 gets a free T-shirt, but we'll see. It may have only been the first 100 to reach level 8, and I am more like number 130.

It is a progression of your contribution to the blog

Higher levels come with some privilege/responsibility. For instance at lower levels (up to level 3 if I remember correctly) your posts don't go live immediately, they are checked first. At level 6 you gain the ability to approve other people's comments etc. At level 8 you get a free shirt.

You'll gain levels gradually by just participating in discussion and being active on the site; I wouldn't bother "level hunting" as it's transparent and annoying!

[agnostic.com]

You get an agnostic T-shirt at level eight, and are also made a moderator around level four, I think.