There are actually two different level scales of items. The first is based on World of Warcraft's color coded item rarity system. You may think that this color system would determine the rarity of an item, but it really doesn't. So here's a summary of what each type of item is worth:
Poor Quality: These items are not worth selling in the auction house. Sell any of these items directly to an NPC if you can't use them.
Common Quality: These items are once again not worth selling in the auction house. Dispose of them at your nearest NPC.
Uncommon Quality: These items have a chance at selling at an auction house. It depends how useful they are. These are great items to sell to lower level characters in your Alliance specific auction house.
Rare Quality: Now we are getting somewhere. Most of these items are worth selling at the auction house.
Epic: Many of these items will go for over 100 gold. If you have one of the most useful and rare Epic items you may consider putting it up for auction in Gadgetzan. I have seen certain Epic items for over 1,000 wow gold http://www.wowwowgold.com in extreme cases.
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