The RAF's rank system is, in part, based upon that of the Royal Navy. The Royal Navy is known as the Senior Service because it is the oldest (it was also the only Service to be formed by a Monarch, Queen Elizabeth I). The Army is next in precendence, followed by the Royal Air Force (the Junior Service). The ranks equate as follows, starting with the most junior and working up (RN=A=RAF):
NO RANK = NO RANK = Acting Pilot Officer (I was there once!)
Midshipman = 2nd Lieutenant = Pilot Officer (I am there now)
Sub Lieutenant = Lieutenant = Flying Officer
Lieutanant = Captain = Flight Lieutenant
SENIOR = FIELD = SENIOR OFFICERS:
Lieutenant Commander = Major = Squadron Leader
Commander = Lieutenant Colonel = Wing Commander
Captain = Colonel = Group Captain
FLAG = GENERAL = AIR OFFICERS:
*: Commodore = Brigadier = Air Commodore
**: Rear Admiral = Major-General = Air Vice Marshal
***: Vice Admiral = Lieutenant-General = Air Marshal
****: Admiral = General = Air Chief Marshal
*****: Admiral of the Fleet = Field Marshal = Marshal of the Royal Air Force
The very highest ranks are essentially honorary, although usually any four-star officer will be promoted five-star on elevation to the peerage (take Field Marshal Lord Brammall).
The RAF's actual rank slides also resemble those of the Royal Navy. Instead of gold braid, the RAF's ranks consist of alternating bands of navy blue, light blue and air force blue.
I think that the RAF system is actually very sensible; it is the only system that relates rank with task. The RAF's traditional organizational hierarchy would run Aircraft - Flight - Squadron - Wing - Group - Command - RAF. Thus, Pilot Officers and Flying officers command aircraft, Flight Lieutenants command flights, Squadron Leaders command Squadrons, and so on. This is actually very much the case today; a flight of airmen, say, in a Fighter Control bunker will still have a Flight Lieutenant as their flight commander.
Mention should be made of the Royal Air Force College at Cranwell, the oldest air academy in the world (formed initially in 1916).