How are POINTS awarded?
I have been trying to figure out how points are awarded for solving cryptograms. So far I have solved 44 puzzles, and I have plotted a graph of the points awarded vs. seconds to solve. My main conclusion from examining this graph is that there are several categories for difficulty. I am not quite sure how many, but I think there are at least five. For each category, the points awarded is based on the following formula:
points awarded = A – S * B, where: A is a point value constant that depends on the difficulty category, B is a points per point constant (which is about 1/6), and which may or may not depend on the category, and S is the number of seconds taken to solve. What remains a complete mystery to me is how a category is assigned to an individual puzzle. Can anyone please help me figure this out? 
There are several great forums devoted to scoring, but basically there are THREE levels of solving difficulty: Easy, Average, and Difficult. If you look at your "recent games" you will see this. Each of the levels has an assigned point value but the number of points awarded is also based on the time it takes you to solve it.

I have been lead to believe that the 'difficulty' scale is based on the number of words. I think this is too simplistic.

It isn't just the number of words, but the number of characters in the quote.
Here's Maradnu's analysis of the scoring grid http://www.cryptograms.org/forum/showthread.php?t=194 
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