The grades are based on 2 basic specifications One is the % of fat to meat. Not a fatty piece of meat but the amrbling thru the meat and next but the age of the animal.. This might help.
USDA Prime Graded Beef.
The Most Tender & Flavorful of Steaks Why USDA Prime Steaks Are Superior.

Anyone that has savored a USDA Prime Graded Steak knows that it is delightfully tender and juicy with a buttery flavor that makes it distinctively superior to any other steak. Of all the beef produced in the US, less than 2% is certified as USDA Prime. Typically you will not find USDA Prime in the supermarkets since its limited supply is gobbled up by fine meat purveyors that retail it to upscale restaurants and affluent consumers.
How The USDA Grades Beef.
The United States Department of Agriculture (USDA) meticulously grades beef at the request of a meat packer. Only beef that is USDA inspected may carry the USDA shield of authenticity. The grading system determines the quality rating of beef based upon a very complicated inspection system which essentially measures the amount of marbling (fat specs) in the ribeye muscle (lean) portion and combines the maturity (age) of the beef carcass to arrive at the inspected grade quality.
Basically the higher the ratio of marbling and the younger the beef, the higher the grade. It is the fat marbling that determines tenderness, juiciness and flavor. The age of the beef determines beef texture and also effects flavor. Younger beef produces a finer texture and a lighter red color.
Therefore USDA Prime Grade has the highest rating of a combined high ratio of marbling with the youngest maturity of beef. That's why prime is the most flavorful and most tender with the finest of texture.
USDA Prime, Choice and Select Grades.
Although there are eight levels of USGA graded beef there are generally only three USDA grades of beef that you would buy in a supermarket, a butcher shop or a restaurant. They are USDA Prime, Choice or Select which is the order of grade from the highest to lowest. Two lesser grades are Cutter and Canner which is what you would typically find in frozen pot pie dinners, microwave burritos, hamburgers and other processed food products. USDA Select is not very far above the bottom of the edible barrel, though some major chain stores will try and infer to a consumer that Select is a premium grade that is often marketed with a "catchy brand".

Beware of marketing deceptions where some supermarkets may try to fool an unsuspecting consumer by using the words "prime" and "choice" without being attached with the official "USDA shield". Unless prime and choice carries the USDA label, what you are buying may not be the real thing. Some upscale restaurants employ clever wordsmiths to write menu copy that deceives you into thinking you are ordering a USDA Prime Steak when in reality you may be being served the less costly "Choice" version. In fairness to restaurants that serve USDA Choice Filets, it's degree of marbling could closely approach that of Prime when the measurement is very near the threshold that separates it from Prime.
When shopping for quality steaks, always look for the USDA shield. When ordering a steak at a restaurant always ask your server what the USDA grade actually is. Often you'll hear a bit of stuttering and a quick diversion from the subject. That's a signal to become more inquisitive.

USDA Prime Steaks.

USDA Prime is the superior grade with amazing tenderness, juiciness, flavor and fine texture. It has the highest degree of fat marbling and is derived from the younger beef. That's why Prime is generally featured at the most exclusive upscale steakhouse restaurants.
Used by permission of the USDA 
USDA Choice Steaks.

USDA Choice is the second highest graded beef. It has less fat marbling than Prime. Choice is a quality steak particularly if it is a cut that is derived from the loin and rib areas of the beef such as a tenderloin filet or rib steak. Generally USDA Choice will be less tender, juicy and flavorful with a slightly more coarse texture versus Prime.
Used by permission of the USDA

USDA Select Steaks.

USDA Select is generally the lowest grade of steak you will find at a supermarket or restaurant. You will find it tougher, less juicy and less flavorful since it is leaner that Prime and Choice with very little marbling. The texture of Select is generally more coarse. Therefore, Select is not nearly as enjoyable or desirable.
Used by permission of the USDA
That brings up something weve talked about here in the past. i had mentioned awhile back about how i no longer seem to enjoy a steak at home anymore. for about the past 3 years i have found them to ne fairly tatelees and lacking in juices. Also even knowing I had under cooked it the center was more towards brown thamn pink. Kroger is big in my area and they sell far more select than choice. Even when i buy what they call Ang=us Beef which is their choice grade it still seems to be a shadow of its former glory.
One other thing that i think has made a difference is all the deisgner cuts of beef now. You dont see the old standbys of yore. I cant remember when I saw a Chuck Steak. I meant either the 7 bone blade steak or the shoulder arm steak with the round bone. What about the Bone in sirlin steak? The flat sirloin with the diaganol bone accross it and 1/2" of fat around the edges. Why isnt there a nice fat cap on a good steak these days.?
<message edited by brittneal on Wed, 07/8/09 1:44 PM>