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Citation needed. I read that they changed premade ELO adjustments to be negligible for bad players and high for good players. This was like a year ago or around that.

Well, my citation is an email sent to me by Tom "Zileas" Cadwell. I've talked to the Riot guys quite a bit, they actually play our Facebook game. I even got to check my elo :)

He didn't get into too great detail though so it's possible I misunderstood and it actually is a sliding scale, though I've seen no evidence of that (and quite a bit of the opposite).

Zileas is a pretty smart dude, and they've been working on this for a while. I can't find the post I was talking about, but this one hints at the adjustments: https://www.leagueoflegends.com/board/showthread.php?t=12029

"This bonus is calculated from a bunch of research we did on hundreds of thousands of game results to figure out how much of an advantage being in a team is. We do some behind the scenes adjustments as well for stuff like beginners paired with pros, etc."

Some opaque, out of context statistical data: http://www.leagueoflegends.com/board/showthread.php?t=16705

Personally, the matchmaking seems to me to get better and better the more players pick up the game. I still see unbalanced games, but I can't remember the last legitimate curb stomp, where one team was simply outclassed...

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