We use the Goldmine Grading System.  The grades we use are Near Mint, Very Good++, Very Good+, Very Good, and Good.  We do not use the lower grades such as Fair or Poor.
NM - Near mint records are shiny, with no visible defects. It looks like it was opened for the first time.  NM records don't have to be "never played", a record used on an excellent turntable can remain NM after many plays if the disc is properly cared for.
VG++ - Except for a couple minor things, VG++ records would be Near Mint.  They may show some slight signs of wear, including light scuff marks or very light scratches that do not affect the listening experience. 
VG+ - These records are still in excellent condition with a few more minor surface marks than the VG++ would have.  Minor signs of handling are OK, such as telltale marks around the center hole, there may be some very light ring wear or discoloration, but it is barely noticable.
VG - Many of the imperfections found on a VG+ record are more obvious on a VG record.  They may lack the gloss found on a factory fresh record.  Groove wear is evident on sight, as are the light scratches.  When played a VG record has surface noise, and some scratches may be audible, especially in soft passages and during a song's intro and ending.  
G - Good does not mean bad!  The record still plays through without skipping, but it has significant surface noise and groove wear, and the label is worn, with significant ring wear.