Here's my guess at how it works.

   FinalRating = Sum([Vote]*[WeightForVote])/Sum([WeightForVote])

In other words, multiply each vote by its weight, add them all up, then divide by the
sum of all the weights. So the first vote, the weightings cancel out.

Hi JJS

I can explain it for you (since I wrote it). Graeme has explained how it works technically.

Let me try to put it into English 

Basically, each rating is weighted based on the rating of the person doing the rating. Thus,
if I have a 5-star rating myself and I rate you, my rating of you will carry more weight than
someone rating you who has a personal of only 4 stars. 

In other words, ratings from people with higher ratings themselves carry more weight than
ratings from people with lower ratings.

Why do this?

This prevents low-rated members from having as much influence in a person's overall rating.

Hopefully it is clear now