Another reasonable option is to avoid making the player pick an inappropriate level by picking for them. Off the top of my head, one example is Quake Live, whi

Another reasonable option is to avoid making the player pick an inappropriate level by picking for them. Off the top of my head, one example is Quake Live, which puts every new player in a little test area; first, it challenges them to see if they can jump accurately; then, it challenges them to rocket jump; then, it challenges them to strafe jump. Finally, it puts them in an first-to-15 deathmatch against a bot opponent with adaptive difficulty (so if you start out pwning the bot, it will rapidly get better until it starts evening the score.) By doing so, it forms a good picture of the player's skills so that it can match them evenly against other players immediately. The process takes about 15 minutes, but it certainly saves people a lot of poorly-balanced games. It would be hard to do the same thing in an RPG without a longer test period, but it would be really easy to do so in a more action-oriented game, or a platformer. Of course, one would want to be able to override the "autodetected" difficulty level, but it would simultaneously address the problem of casual gamers getting frustrated because the default is too hard, and the problem of tough-as-nails gamers getting frustrated because they picked one that turned out to be too easy.