Yay for mentioning Slashdot!

Slashdot has a good system, but for increased granuarity users actually need to think more about what they're voting, instead of what is possibly a subconscious, wholistic, instantaneous judgment, which seems pretty applicable for Digg. So there's a tradeoff for a system to be "easy to use" rather than "intelligent."

In this sense the UI becomes a bigger challenge than the data processing. See http://x-o-o.com/news.php?sort=new It's a dictionary-supported rating system with granular voting, in the sense that you can vote 10 or 0.1 if you choose to do so; it also supports weighted voting.

It is much harder to use than digg though so such a system probably will not reach popularity. But I think theory wise it is the best implementation.