Whenever you look at swords put up for auction at places like Hermann Historica, the sword in question is given a rating in Roman numerals, which, as far as I can tell, ranges from I, II, or III. I've gathered that a rating of I is the best, and so forth, and that items can be rated a II-, indicating that they're in a bit worse shape than most IIs but still better than a III.

My question is, can anyone tell me exactly what the criterion are for each of these ratings?

Hi Craig,

I don't know how that auction house bases the decision but it is very possible they may even list the criteria somewhere on the site (I've not looked for it).

A great many American arms dealers typically use a similar grading system for their offerings. Here is an example, with some explanations.
Although this one is dealing with a specific genre, it can give an idea of grading.

http://www.cds1.net/~nardi/swords/values.htm

Some will add more categories in between.

Cheers

GC