I once heard about 3 levels of knowledge:
1. Understanding
2. Remembering
3. Being able to teach
I'm in the school of Bloom's Taxonomy for learning objectives. It goes like this:
1. Remember
2. Understand
3. Apply
4. Analyse, evaluate and create
This grading goes from the known and concrete to the unknown and abstract. But, as said, there are many ways to look at this. Some say that the fourth point can be separated into three points, other's argue they are of equal level of skill. Just take a look at the Wikipedia article for Bloom's Taxonomy (http://en.wikipedia.org/wiki/Blooms_Taxonomy) and you'll see that it even portrays several different perspectives to one (actually two) theory.