From Connie G. Thomas,
Your Guide to Cross-Stitch.
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Breakdown of Stitching Levels for Free Cross Stitch Patterns from About.com Cross Stitch:

Beginner:

When a free Cross Stitch pattern is designated for beginners, the pattern is mostly whole cross stitch and back stitch. Some of the patterns may have fractional stitches, but these are limited. The fabric used is typically Aida in a larger count.


Intermediate:

Intermediate patterns have more color changes, more fractional stitches, and may contain a few specialty stitches. Intermediate stitchers often branch out to try different stitching surfaces.


Advanced Stitching Projects:

Often loaded with specialty stitches, with many different color changes, advanced patterns are for stitchers who are seeking a challenge. Stitches and techniques from other embroidery traditions may be incorporated. Specialty flosses and fibers may be incorporated into the design as well.


Different stitchers and designers define stitching levels a bit differently. Add your comments about stitching levels to the Cross Stitch Forum and read what other stitchers have to say. Some of the definitions are quite humorous.