I don't know.  It seems to be iffy, and I don't even know if it's who is currently the one hosting the room, either.  I've had the same question about matchmaking.

Well from what we know 343 uses some combination of True Skill and their own secrect sauce. But I do not think you can just say ok I have a "ranking" of X and will only be matched with like people. That might be the case if you only played alone. If you play in a group, well then your groups "ranking" will be averaged out as you go into matches. But this is all based upon the available player population and the ability of the system to do its best at getting a "close" match. So if you play early in the morning and the player population is X you have a higher chance of having a greater variance of "ranks" being put together. Where as with playing in the evening you will probably be matched up with people closer to your rank due to more people playing, again assuming you are playing alone, if you are in a group then stuff gets averaged out.

Now I can say it works pretty well at least in the very begining of getting rank. When my main tag was being held hostage by H4's no mans land fubar (long story), I had to play on my sons tag that pretty much has never seen the light of day for H4. The quality of players I played with (over almost a week and probably close to 100 games) was horrible. For the first 25 games or so I was averaging a k/d close to 3 (my current is like 1.15 or something) for the next 50 games or so it dropped down to about a 1.5 and then from their a little closer to my current k/d.

Now to compound this issue, H4 will be coming out with a playlist that is ranked (visually, not in game but on waypoint) and that will add an additional layer of ranking. Something like playlist rank and TrueSkill+343 secrect sauce.

Anyways click on that True Skill link and check out the info if you want, you can even Nerd out harder on that page and go into the details page that breaks it down to Uber l337 nerd that I would need to ask someone much smarter then me to break it down for me.

based on this -- http://research.microsoft.com/en-us/projects/trueskill/

There was also a discussion about this in the 343 forums with regard to connection speed.  It starts by matching by skill with best ping.  If the game can't find a good ping match within a certain time, it throws out the skill portion to find any match.  I'll see if I can find a link.

And here I pictured monkies on typewritters...

No no get with the times they're using Ipads 

You mean matchmaking actually works?

Happened to our group tuesday night too. Almost everybody got kicked at least once.