Travis "Shase" Weedon explains all you need to know about how the battle.net system works.
There are a lot of misunderstandings with regards to the battle.net ladder in SC2, so I thought I would take this opportunity to educate players on the subject.
Advancing through the leagues:
"I'm rank 1 in silver, I must be close to advancing!" Advancing has NOTHING to do with your division rank. You could be rank 1 in your division for years and never advance, how else would there be players with over 1300 points in BRONZE league?

Jim was really happy when he accomplished his life goal
Advancing is simple, as you start winning more and more games and losing less and less games, battle.net will match you up with players from higher leagues. Beat enough of these higher league players and you will be promoted. Division rank, games played, and points - these are all irrelevant. If you're not winning against the higher ranked league players, you will not be promoted.
Favoritism:
You are not favored based on points, nor win percentage (and I hope I shouldn't even have to mention division rank) but some kind of magically mysterious internal Blizzard algorithm that you can't see. For the most part I think it is fairly accurate.
Divisions:
Divisions in my opinion are a stupid idea. Comparing players across divisions based on their rank is meaningless. The point of it is to give you a more short term goal to be ranked high in your division vs high on the entire ladder. But this only suits the noobs who are okay with just being top in their no-name division. It causes a lot of annoyances - people have asked me many times what rank I am in my division, but it is such a stupid question. You are not confined to playing players in your division at all, so why rank everyone separately? It only serves in giving the illusion that you're better than someone else with twice your points in a harder division. Personally I would rather be ranked #16 081 in a ladder that matters, rather than #6 in a completely meaningless ladder.
Conclusion
Luckily though, there are sites like http://www.sc2ranks.com or http://www.sc2ranks.co.za/ which bring some sanity to this madness. These custom designed websites use data directly from the battle.net ladder, and draw a more accurate picture of what is really going on.
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