Setting different privilege levels is partly determined by what kind of authentication you use. you can either use local authentication or use AAA with TACACS+ and RADIUS. The Cisco Documentation has more info for you.
An example of the commands you would use locally are:
Router(config)# privilege mode level level command-string
Router(config)# enable secret level level {0 |5} password-string
Some of the guidelines from Cisco are here:
Privilege Command Enhancement: http://www.cisco.com/en/US/docs/ios/12_2t/12_2t13/feature/guide/ftprienh.html
Configuring Passwords and Privileges: http://www.cisco.com/en/US/docs/ios/12_2/security/configuration/guide/scfpass.html
