Rarity normally goes from 1 to 5, 1 being common and 5 being rare.
If rarity is set to 0 on a specific item, then it cannot be randomly found in game. This usually happens in one of the following cases :
- An item only found with special requirements. (e.g. Damaged Stasis Pod)
- An item only comes equipped on a particular ship. (e.g. Shield Overcharger +)
- An item only used by the AI. (e.g. Boss Missile)
- An item only used for specific game mechanics. (e.g. all the drones' weapons)
Every sector has a table of loot which then gets weighted by its rarity and selected accordingly. So if there is only 1 "rare" item and 51 "common" items then it's not the same chance to get a rare as a common in the case where there's 25 rare and 25 common.
See the following pages for items' rarities: