The "link ratings" switch activates a ratings option where visitors can select a number of stars to give a link. The default scale is 1 to 5 stars. If you want a different scale you can customize it at Admin -> Settings -> Links. The images used for these stars are star_active.gif (an earned star), star_half.gif (half an earned star) and star_inactive.gif (a star not earned), all in your templates/images_default images directory.

The usergroup permissions control who can rate links.

If you want multiple rating types you can add custom rating fields.