1) You need statistics tracking. Picking an official algorithm to determine player skill and being sure that cheating cannot affect rankings much (ie: cheaters can have stats wiped as if they'd never existed to affect the ranks of others) is an extremely difficult task.
2) Unlocks sound neat, but can sometimes be a bad idea. In BF2, there's a first tier of weapon unlocks that are sometimes better than the standard weapons. Worse, though, is a second tier of unlocks if you own the "spec ops" expansion, which grants you things like flashbangs and an extremely accurate sniper rifle which are definitely unfair to lower-ranked players (especially new people).
A better idea is to motivate people with donations. Natural Selection does something very simple: they have a system where you can donate to receive a "constellation member" icon beside your name in-game. It's subtle, but a lot of people have them, and it's a good way to show support for the game while feeling like you got something tangible for it.
