I don't know how they work. Do they have any connection to the class of ship you're commanding?
Cryptic has a couple of news items on their site about it, here
, and here
I like the way the ranks work in coordination with the skill trees, I'm just thinking the way they structured things builds them into a box a bit.
Also, it's nitpicky, but I wish they had used a few more of the established ranks from ST. If they are successful (every MMO should have this problem, of course) there will inevitably be pressure to create higher level content, akin to raising the level cap in WoW.