Meta Levels are at the simplest explanation graduations in the quality of the item.
A simple rule is the higher the meta level the better the item.
You can check the meta level of an item in game by clicking the show info property in the menu.
From the EVEWiki:
The Meta level of an item indicates its quality. The higher the number, the better the item often is.
Tech I items have no Meta level displayed. They are considered to be of base quality.
Tech II items have a Meta level of 5. They are the highest quality items that can be manufactured and sold by players.
Certain faction or other items may have Meta levels higher than 5.
Their attributes, however, may not always be better than those of the Tech II variant of the item.
Meta 0 "Tech I"Tech I items are meta level 0, they are the most poor quality of all the versions of an item in game. They often have poor bonus, combined with high CPU, PG, and Capacitor use.
They are created by players from minerals, as such they have a cost fixed by the mineral market which is largely stable. Due to the nature of the market and production the price is largely dependant on the cost of materials. There is no good reason ever to use these items directly on your ship, not even cost.
They are often more expensive than the named versions.
Meta 1-4 "named versions"The named versions of the modules are dropped in varying quantities from NPC's in missions, belts, and complexes. They have the same skill requirements as the Tech I versions, however they usually have significantly better bonuses, lower fitting requirements and in terms of active modules, often lower activation use. Due to the source of these being loot drops, they are often seen as having little intrinsic value, mission runners often dump these onto the market at very low prices to bulk buy orders. There is often more being dropped per month, than meta 0 (T1 items) produced by the manufacturing process, hence oversupply of mission loot combined with no fixed cost (ammunition+time) to produce means they often sell for less than the Tech I counterpart.
Meta 4 items or "Best named Meta" often have the same bonus as the Tech II item, but with lower fitting/activation costs, and no extra skill requirement. These items are often very valuable, and the market knows this, you can expect to pay more than the cost of Tech II items for these. They are often used over the Tech II versions on very tight fitting ships, or by pilots lacking the skill requirement for the Tech II version.
Meta 5 "Tech II"These items are mainly* created by players using the research/invention process, the cost fluctuates based on several index's but is still relatively stable. In a change to all the other meta levels, Tech II items also need a higher level trained of the required skill to use. They usually have good bonuses, and marginally higher fitting requirements than the Tech I item.
Tech II weapons allow the use of advanced Tech II ammunition, which you are unable to use in any other meta level items, including the higher faction and officer meta levels. Tech II weapons also gain a second damage bonus from the weapon specialisation skill. Meaning that a Tech II weapon can have more damage with the same ammunition as a faction or best named meta weapon which has exactly the same damage bonus attribute.
They can be easily identified by the yellow flash in the top left corner containing II
This is where it gets a little grey, they are split into the following categories, but the line blurs between the exact levels. The easiest way to split them is by the colour tag in the top left corner.
Meta Storyline Items
COSMOS items do not drop, they are manufactured from materials and BPC obtained from COSMOS missions and sites. They require specialized skills to manufacture, and very few people bother to manufacture them at all, as there are often cheaper faction / deadspace alternatives. Few people do COSMOS missions, so supply and trade volume is low and prices usually higher than the actual value.
Storyline AFAIK are ALWAYS worse than T2 - but have lowest possible CPU/PG need.
They can be easily identified by the green flash in the top left corner containing a O
Meta + Navy Faction itemsThese items claimed from loyalty points stores from the various factions in EVE. They are relatively rare and expensive due to the LP requirement, the best items are often only available to faction warfare members, and thus command a good price. They vary in quality but they will have at least the same bonus as the Tech II item, without the skill requirement. They are often much better.
They can be easily identified by the green flash in the top left corner containing a diamond
Meta + Pirate Faction
These can drop from Special NPCs in asteroid belts though low and null sec. They are relatively rare, and thus command a good price, they vary in quality depending on the item, but they will have at least the same bonus as the Tech II item, without the skill requirement. They are often much better.
Meta + Deadspace Items
These drop only from inside of NPC complexes they are often of very high value. The bonuses are much better than the Tech II versions, however some have higher activation charge to balance them. There is usually several version of the item C-Type being the lower version, with B, A, and then X-type being the best. Due to the loot table changes it is often worth looking at the market value of all version, as often the prices do not reflect the best versions.
Meta + Officer Items
These drop from special officer NPCs in deep nullsec, they are elite items, with some massive bonuses over even the Deadspace items, expect to pay billions of isk for the good ones. Some of them also have massive PG requirements, thus are unable to be used on smaller ships.
There is an option in game to compare items, open the info of an item in game, and look at the other variants far right tab. At the bottom there is an option to compare versions, you can select the attributes you want to compare and quickly see which version of the item is the best.
Notes:In terms of the invention process of Tech II items, the meta level comes into play, the higher the base meta level used, the higher the chance of successfully gaining a Tech II BPC.
Tech I items have a valid use in terms of mineral compression. Currently with the correct skills/installation you can manufacture items from raw minerals which take up less space than the minerals used. As you can also reprocess these with minimal/zero loss you can transport abnormally large loads on minerals in this manner. Linky
*A few Tech II blueprints originals are in existence, these rare blueprints were given out (with some controversy) early in EVE's life, and can produce Tech II items without the invention process.