I've been wondering that too. Slashdot has gone through all of the problems that face digg, reddit, etc. And they have found some pretty good solutions through trial and error. They are even well documented here: http://slashdot.org/faq/com-mod.shtml

Generally I am amazed that moderation systems are not better than they are, especially since the stakes seem to be so high in this niche right now.