Player Potential (Baseball)

A player's potential rating determines how he will progress between seasons. Here's a breakdown:

Hitters

Classic - Uses the classic progression system, which means player will increase steadily until peak age (as determined by your league) and then decline steadily once past peak. There are a few exceptions (which apply to ALL potential ratings): Players with less than 100 real-stats at-bats won't progress at all. Players with less than 300 at bats will progress much slower. Players who have little to no speed won't ever get "faster" and players will stop getting "faster" at age 26 regardless.
Superstar - Players will become better overall hitters in all categories: power, discipline, average, and they will increase faster and higher than the classic progression. This level is for the true stud prospects. The decline is generally slower, although they will still decline past peak age.
All-Star - This is closer to the classic progression, except it focuses more on plate discipline than power numbers. Hitters will get better at taking walks and making contact, with slight power increases. They will slowly decline past peak age.
Unpredictable - As is often the case in baseball, you never know where a prospect may go. One year he may get better, the next year he may get worse. Or a combination of both in different categories. Or he may just stay flat. He is most likely to decline past peak age, but he may stay flat or even improve.
Flat - This prospect will mostly stay flat - he is who he is and he's not going to change much.

Pitchers

Classic - Uses the classic progression system, which means player will increase steadily until peak age (as determined by your league) and then decline steadily once past peak. There are a few exceptions (which apply to ALL potential ratings): Players with less than 20 IP won't progress at all. SP and RP will obviously progress with increases that make sense for their roles.
Superstar - Pitchers will become better overall in all categories: power, stamina, etc. and they will increase faster and higher than the classic progression. This level is for the true stud prospects. The decline is generally slower, although they will still decline past peak age.
All-Star - This is closer to the classic progression, except it focuses more on stamina and control, rather than power (ie, strikeouts). They will slowly decline past peak age.
Unpredictable - As is often the case in baseball, you never know where a prospect may go. One year he may get better, the next year he may get worse. Or a combination of both in different categories. Or he may just stay flat. He is most likely to decline past peak age, but he may stay flat or even improve.
Flat - This prospect will mostly stay flat - he is who he is and he's not going to change much.

Note on Contracts
A player's potential will have a slight impact on his salary ask (for those leagues that use contracts). So a superstar is going to want more because his upside is higher, whereas other ratings could ask for less than they typically might due to the fact they could stay flat or even regress.