Level1 implements a simple "level" based node access system using a single vocabulary defined by the taxonomy module. Level based access is defined as a cascading access based on the user level compared to the level of the content. An example makes it more clear.
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For Drupal 7, a module that can be used to accomplish level1's functionality is Access By Term.
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Say you want to create content and put it into one of 3 levels. You coulddefine a vocabulary, lets call it Level1, with the following terms.
Beginner
Intermediate
Advanced
The vocabulary is non-hierarchical and the terms are weighted as appropriate for the desired cascading order - ie. Advanced is heavier then Beginner.
Now you can start "tagging" your content with any of those 3 options (4 if you also allow "none" which is perfectly valid and a content with "none" is not access controlled by Level1). As with all vocabularies, its also up to you which content types to apply it to.
Next you edit your user accounts and also put users into one of the 3 taxonomy levels (or 4 if allowing "none"). In otherwords, you assign the taxonomy term to your users as well.