I've been working on this for some time now. I'm planning to writing this up and submitting it to the Journal of Quantitative Analysis in Sports. I'll publish a more thorough explanation of my methodology within the next couple of weeks. For now, he's the quicky version.

The inputs to the model are:

Strength of Schedule (shamelessly lifted from Sagarin)
Conference Average Margin of Victory
Team Margin of Victory
Scoring Defense (points per game)
Scoring Offense (points per game)
TO Margin per game

All data other than strength of schedule is directly downloaded from the NCAA stats repository. The raw statistics are normalized by subtracting each team's statistic from the average of all 120 teams and dividing that by the standard deviation of the 120 teams.

Using data from 709 played in 2011, a multiple regression model was performed with the 6 inputs as the independent variables and a teams actual margin of victory in a game as the independent variable. Each game was entered in the model twice...each team is evaluated independently. This provided a regression model with 1417 df.

The base model has an r-squared of .636.

With the computed regression equation I can run a simulated season in which every team (i) plays every other team (j). A positive predicted y-value means that a team is predicted win, a negative predicted y-value means that a team is predicted to lose. There are 14280 (i,j) combinations. After the model is run, all that is left to do is total up the number of predicted wins to establish a 1-n ranking of all 120 teams. Using the data from 2011, the following is how my model ranked all 120 BCS teams. I'm pretty comfortable with the results.

My plan is to publish a weekly ranking this Fall.

Team	Rated higher than X teams
Alabama	119
LSU	118
Oklahoma State	117
Oklahoma	116
Wisconsin	115
Stanford	114
Oregon	113
Arkansas	111
Texas A&M	111
Boise State	109
Michigan	109
South Carolina	108
Georgia	107
USC	104
Florida State	102
Houston	102
Michigan State	102
Florida	101
Notre Dame	101
Texas	101
Baylor	99
Missouri	96
TCU	96
Vanderbilt	96
West Virginia	95
Kansas State	94
Mississippi State	92
Cincinnati	89
Ohio State	88
Nebraska	85
Southern Mississippi	85
Temple	84
Arizona State	83
Tulsa	82
Auburn	80
Virginia Tech	80
Clemson	79
Rutgers	79
BYU	78
Iowa	78
Toledo	78
Utah	78
Georgia Tech	77
California	76
Penn State	76
Tennessee	76
South Florida	73
Louisiana Tech	72
Nevada	71
Miami (Florida)	69
Northwestern	69
Northern Illinois	67
Washington	67
Illinois	66
Iowa State	66
Arkansas State	65
Louisville	64
Ohio	63
Pittsburgh	62
Western Michigan	61
North Carolina	60
Texas Tech	59
UCF	56
Navy	55
Purdue	54
Air Force	52
San Diego State	51
Washington State	51
North Carolina State	49
Utah State	49
Connecticut	48
Florida International	48
Miami (Ohio)	48
Kentucky	47
Wake Forest	47
UCLA	46
Arizona	45
SMU	45
Syracuse	44
Virginia	44
Louisiana-Lafayette	41
Oregon State	41
Boston College	39
Duke	34
Hawai'i	34
Bowling Green	33
Western Kentucky	33
Minnesota	32
Mississippi	31
UTEP	30
Ball State	29
Marshall	28
Army	27
East Carolina	26
Eastern Michigan	26
Wyoming	26
Kent State	25
Louisiana-Monroe	24
San Jose State	24
Kansas	23
Fresno State	22
Colorado	21
Maryland	20
North Texas	20
Buffalo	19
Indiana	18
Central Michigan	15
Rice	14
Colorado State	11
New Mexico State	11
Troy	11
Idaho	7
UAB	7
Middle Tennessee	6
Tulane	4
Akron	3
Florida Atlantic	3
UNLV	3
Memphis	2
New Mexico	1