Chess, checkers, go, backgammon and many other online games use an ELO based rating system.
There are variants of chess involving 4 players, like bughouse. These games also use an ELO based rating system on online chess servers such as freechess.org and chessclub.com.
I think an ELO system would be a huge improvement over the current ranking system. It could also make the game more enjoyable, as the other places besides first could be rewarded as well.
http://en.wikipedia.org/wiki/Elo_rating_system for all the details.
