Can anyone help me to understand what the differences are between the rank and level in the _users table?

It seems to me that the level of the user created through XOOPS admin/registration is always "1", even if I assigned the user a part of the webmasters group and the his rank is also webmasters. Is there any user action that will place the user to a different level? And if the user is on a different level, can he do anything that users at level "1" can not perform? Such as being able to choose from a new set of avatars?

Thanks.