Mint (MT) (9) - A card with four sharp corners, 50/50 to 55/45 centering, no imperfections or signs of wear. Smooth Edges, Original Color border and gloss. Even cards straight out of the pack do not always grade mint. Pre-1970 Mint cards typically sell at 150 percent or more of the Near Mint price.

Near Mint to Mint (NMMT) (8) - Looks perfect upon initial inspection. One very minor flaw is allowed: Sharp corners to the eye, but under magnification slight imperfections, A few minor print spots, or a few focus imperfections. Close inspection shows very light corner wear or an edge ding. 60/40 or better centering. Relatively smooth edges. Original color border and gloss.

Near Mint (NM) (7) - A near-perfect card. Near Mint cards have sharp corners. Centering is no worse than 60/40 or better and the card must have its original gloss. They never have a wrinkle. They can have a light scratch or occasionally a very light stain. Near Mint cards are the standard by which other grades are usually gauged. Mint cards bring 150 percent of book value.

Excellent Mint (EXMT) (6) - A card with only two or three minor imperfections. Must have original gloss and centering no worse than 70/30. No wrinkles. Excellent Mint cards usually sell for 75 percent to 90 percent of the Near Mint price.

Excellent (EX) (5) - A card with a few minor imperfections. Some original gloss is lost and the edges show moderate wear. All four corners typically show some significant wear but not what you'd call rounded. No creases on an excellent card or serious wrinkles on the front. Centering is no worse than 75/25. Excellent cards usually sell for 50 to 75 percent of the Near Mint price.

Very Good / Excellent (VGEX) (4) - Highest grade that a card can get if it has a wrinkle on the front. Wrinkles are incredibly common on vintage cards. Even cards that appear to be in very high grade can have them. Some people think that this grade is the highest a card can have with a wrinkle on the back of the card as well. A card without a wrinkle can exhibit a little bit of corner rounding. The edges might be worn but not extremely seriously. As well as a little surface wear including perhaps a little paper loss.

Very Good (VG) (3) - A card that shows obvious handling but is still attractive despite wear and imperfections. A Very Good card may have a crease, but one that's not severe enough to make the card unattractive. Most of the original gloss is lost. The card should look very nice upon casual inspection. Problems should show up after closer inspection. Very good is the highest grade that can have a true crease. Cards with a whole bunch of wrinkles should be graded this. Very Good cards usually sell for 25 to 35 percent of the Near Mint price.

Good (G) (2), Fair (F) (1), & Poor (P) (1) - A much worn card with many major imperfections. Collectors usually use cards of these grades as fillers until better ones can be found. Good (G) cards have some eye-appeal but have obvious flaws which are evident and unpleasant. A Good card might have a heavy crease that doesn't make the card completely disgusting. A crease across the middle might cause a card to be downgraded to Good condition. A good card doesn't have a crease so bad that you're worried that a piece of the card will fall off. A good card can have very significant corner rounding. If a card has writing on the front, it can be at most rated good. Fair (F) cards may have been wrinkled and/or creased but you can still make out the picture. It may have some surface damage but hasn't been completely trashed. A card with tape on the front at most is fair. Poor (P) cards may have been creased, wrinkled, written on rudely (autographs don't count) or have a piece missing. A card with a hole in it no matter how small is Poor. With very little market for such cards, they are valued at 5 to 10 percent of Near Mint Price.

Grading a Card

Grades of cards are determined by weighing the conditions or quality of four basic aspects of the cards. At times it's easy to grade a card because of one aspect being defective, and it's commonly recognized that if a particular aspect is defective the card should get a certain grade.

Most times a card is graded based on its worst feature. If other features of the card are particularly good then the grade of that card usually is raised slightly, and if several features are equally bad it might lower the grade a bit.

Corners and Edges

Corner wear is the most important aspect of card grading. Also the hardest to get right. It is very difficult sometimes to evaluate corners, while other features are usually pretty easy to figure out. If the card does not have mint corners, it cannot be mint.

Edge wear is usually less of an issue; but sometimes a card is made with edge problems, such as rough cuts, but most occur outside the factory.

Surface

This mainly has to do with creases, wrinkles and scratches. As well as some "printed on" aspects of centering. If a card has a specific surface problem like a wrinkle, the grade of the card is pretty obvious. Other time it's harder to notice like if the card is a little out of register (focus) or has a chip. A bend across a corner is usually a corner problem not a surface problem. If this was a surface problem then it's a crease and this would drop the value to Very Good. The closer and closer to the corner the problem is the less and less it becomes of an issue. If it gets so close to the corner it only drops the grade from Mint to Near Mint / Mint.

Centering

Higher the grade the less tolerance there is for poor centering. Centering in most cases is crucially important. Centering is nasty to grade because it's something that the card is born with, a card doesn't get bad centering after leaving the factory. To assess centering you have to know how to compute it.

Computing centering: measure the width of a border, then measure the width of the opposite border. Divide one of these values by the sum of both values, and express the result as a percentage.

Example, if you have 2 mm of border to the left, and 3 mm of border to the right, you have 5 mm of total border. 2 / (2+3) = 0.40 which is 40%. 3 / (2+3) = 0.60 which is 60%. So this card is considered to be 40/60.

If a card is centered badly one way, and well the other you don't average the two measurements. Centering is always the worst case scenario. A card that is centered 50/50 one way and 80/20 the other way would be considered 80/20.

Sources
http://www.seanet.com/~brucemo/card_articles/grading.htm
Trading Card Central Grading Page