The primary difference in grades of flooring material is the range of colour found in the grade, size and frequency of acceptable knots, and average length of any given order.
Basically the accepted grading terminology is as follows
clear
select
#1 common
#2 common
utility
Most mills also offer a "select and better grade" which is a combination of select and clear
Some mills offer a "mill run" grade which is a compilation of all grades above utility.