As many gamers will agree, d20's default system for determining CRs is BrOkEn... broken to the degree that the system assumes a naked DnD fighter poses the same challenge than the same fighter wearing mythrill armor and two vorpal swords.

My new criteria for formulating CRs is based on the the AD&D criteria for determining monsters Hit Dice, and tries to be as in-depth as possible when taking into acount all possible circunstances that pose risk. I've banchmarked my alternate system on several monsters from the monster manual and the resulting CRs are fairly similar for most monsters. However, this system proved to be a lot more comprehensive when benchmarking it on player characters from my gaming tables. On the old criteria, the top-fighter from my DnD table is CR 9(his level) wether he is naked or fully equipped, while on my system he is CR 8 when fully equipped and prepared (on full gear he is AC 24, has 3 attacks per round each one doing from 11 to 36 points of damage, and the party's wizard always boosts him before every combat, plus, he is lucky as hell)... BUT his challenge rating drops to 4 if you catch him naked and off-guard (AC 12, only two attacks per round each one doing 1d4 subdual damage, and no special attacks to talk about).

The fact that this system assumes wizards and psionics to possess several other abilities (death attacks, DR, etc) besides the single 'spells' category for determining CR is similar to the fighter above: a wizard wont pose the same challenge to a group of adventurers caught off-guard and with the wrong spells memorized than the same wizard already waiting for you with Mage Armor, Iron Body, Improved Invisibility, Shield, Protection from YOU, Haste, Protection from Elements, and Shapechange on himself, all attributes magically boosted; arsenal of combat spells with 6 Disintegrates, 5 Fingers of Death, and 4 Wails of the Banshee, plus a Staff of Chain Lighting in one hand and rod of Maximized Vampiric Touch in the other....a bit long example but I think you get my point by now.

The point where most people can get disoriented is the templates, which are asigned a CR way GREATER than the previous system...however, if you have payed a close look at them you'll realize their CRs were seriously underrated: A lich, for example, would recieve a +11 CR in my system, taking into account the template increases your hit die to d12, makes you immortal, grants you a +5 natural armor bonus, DR 15/+1, grants you a fear aura and a paralyzing touch (paralyzed target= HELPLESS target= coup de grace), all undead immunites AND turn resistance, +6 ability points, +8 racial modifier on SIX skills, plus if destroyed, the lich simply reforms itself as long as their phyllactery is intact. And that considering we're not playing in Ravenloft, where they have even more powers.... now tell me if I'm wrong.

However, in order to keep game balance, this system assumes the player characters' Challenge Ratings are also properly adjusted: A 10th level android Combat Specialist armed with a full arsenal of heavy weaponry at his disposal and layered CF protection would have a CR 17 of because he has greater than 20 Defense, possesses 10 HD, is a construct, has DR, fighter-equivalent attack bonuses, greater than normal hp, his multiple attacks do more than 30 damage, does more than 20 damage with his assault rifle, has special defense and attack forms, and has special items. Because of that, he would recieve experience as a lv-17 character in the CR table (ie he recieves no XP from oponents lesser than CR 10)... which is only logical if you think about it.

Revised Challenge Ratings Table