Kaggle has a new and interesting competition on building a chess rating algorithm that performs better than the official Elo rating system currently in use. Entrants build their own rating systems based on the results of more than 65,000 historical chess games and then test their algorithms by predicting the results on a holdout set of 7,800 games.
Looks like an interesting problem. The only other thing that comes to my mind literature-wise is that Microsoft built and published their TrueSkill(tm) Ranking System for the XBox in order to match players with similar skills in online games. In the original paper at NIPS, the authors had shown that TrueSkill outperformed Elo.