Someone put me out of my misery and answer this mistery that has been haunting me for a long time. (Answer intelligently, no insults please kids).  Why in the world can I beat players rated 1350 and then lose to player rated in the 1000s.  What in the world is going on ?  I feel so frustrated.

Am I just really dumb and unable to improve my game ?

You're over confident. That's why.

The level of play a human exhibits is never constant, a rating only shows how good on average a player plays any given game but there are some where you will play better than others. Also a factor in all of this is your style comfort, on some positions you will feel more at home than in others and in consequence play better or worse. Your mood has to do with it too. The last factor is random error (ie:hanging a piece). All of these can combine and in an odd day you may lose a game or two to a very low rated player.

A lower rated player has less pressure/expectations of winning and is possibly more relaxed in their thinking on moves aswell as being more carefull knowing their opponent is much better.

Couple this with a higher rated player taking an opinion of thinking they should win easily, not playing maybe as well as they can and not thinking too hard on each move because they expect to win with little effort or dont expect their opponent to be very good (going back to overconfidence on the side of the higher rated player as already mentioned).

This can be fatal and is probably the reason why half the games won by lower rated players than their opponents happen.

Players ranked below 1400 commonly make huge mistake after huge mistake. Games like that its just a question of who steps on the first land mine.

So its not surprising that its not predictable.

I guess we are too complex to be described by a single number.

i lose to lower rated players all the time.  i'm a 1500 and i lose to 1200s and 1300s from time to time.  i think Willio is right--overconfidence.  when i play 1500s and higher i get all hunkered in and i play with purpose.  against the lower rated folk i just muck about.  maybe you're the same.  it boils down to playing lower rated kids like they are 1700s.  

I think IdoSheep is being a bit harsh, but I would agree that most players below 1400 do not necessarily play in a way that can be as accurately determined by the ELO system.  Higher-rated players usually get a little better over time while typically playing at the level they're rated.

Wow, great response guys, thanks for the insights. 

Chess teaches me yet another lesson: humility.

You underestimate your opponents.

they may also be a lot better than thier rating proves due to server disconects or they are still establishing thier rating due to not enough games under thier belt. they show a rating of 1324 but should be in the 1500's. I am a high 1200's but keep getting disconected and lose the game. i beat 1500's all the time.

I always wonder: 

What does a person, that thinks losing to lower-rated players is somehow organically wrong, think when they beat a higher rated opponent?  I guess it begs the question, do these types of players never beat (or even play !?) higher rated opponents and thus gain such stilted perspective?

I would add that you should always look at the average lvl of their opponents, if a 1500 player plays 1300- (ave) players, then their lvl will be shifted to the high side. If a 1200 player is playing 1300+ (ave) players then their lvl will be shifted to the low side.

hahah.  I so never thought about it this way.  I think we all deep down think that we're the something special.  

pff, I'm losing a game against someone rated 1100. I'm rated 1800 myself. I have no clue why he plays so good all of a sudden. He might be cheating...:)

No, he isn't cheating. I checked him, he's only played one game, which he was winning against a 1600, that he lost on time.

people don't always factor too how many games a player has played.  You could be playing an opponent who's 1200, never played a game online and be a master player.  Also, my first three games here I lost and I dropped to a low 900's player.  My point is that ratings with few games are artificial.  If I as a mid 1600 player play a 1200, I am playing a gambled game. He (she) could be great or awful.  Does that make sense?

I lost otb in a 40/2hr SD/1 game to a young man that was rated 714 points lower than me at the Amateur Team East 3 years ago.  He won because he outplayed me in his pet line of the French that I was foolish enough to go into thinking "How could this 13 year-old rated 14 hundred-something know more than me?"

Hubris.

I deserved the 17 move spanking he gave me and I congratulated him for such fine play.  I think he even won a clock for largest upset of the tournament!

And yet, I maintain he couldn't have done it without my help.

My rating will still change immensely unfortunately. Wow, I'm glad that I do not care about ratings on the website!