Well that's a tough question. The short answer is, it doesn't. Everyone on the site largely acknowledges that points are utterly meaningless. This issue has been settled to everyone's satisfaction for so long and so conclusively that it's hard for me to even find links to places where it was discussed, like I did for PPSC vs WTA.

In short, the problem with points is this: You can beat the worst 6 players on the site over and over, and get a lot of points, and still be the 7th worst player on the site.

Because of this, TheGhostmaker, who used to be a mod on the site, but has since left, developed the Ghost-Ratings List. (Even though he's gone, he still updates the list for us.) There's an article on it in Diplomacy World #105. Essentially, Ghost Ratings are comparable to the ELO system used in chess, although more complicated, since there are 7 players. A detailed mathematical explanation is provided on the sites I linked to, but I haven't taken the time to actually understand it beyond "it takes into account the rankings of your opponents." (That's not entirely true, but my mathematical understanding certainly isn't complete.) I am currently ranked 106th (Out of ~3100) in the Ghost Ratings, although ratings for August have not come out yet. By comparison, I'm ranked 93rd in points.

But I'm largely predisposed to object to any ranking system, because they will all be biased against people who do not play as many games. (There is also the matter that statistics for gunboat games and full press games are largely different. I am much better at gunboat, and the Ghost Ratings do not weight gunboats as much as full press games.) Also, I much prefer to look at my statistics in terms of Win/Draw/Survive/Loss. These two reasons led me to create this spreadsheet. (There's actually debate on the site about whether a defeat is better than a survive, since a survive means that you let someone else solo, and theoretically could have stopped it, but that's a wild tangent.) My spreadsheet does a number of things, including allows you to compare live games to non-live games, full press games to gunboats, etc. You can really filter the statistics based on any metric you want.

Here's a link to my profile, if you'd just like to look at that.

To answer your question in short, between my old account and my current one (I left the site for a long time and asked to be banned, for a variety of reasons, primarily that I didn't want my real name associated with my Diplomacy account) I have finished exactly 150 games, with 15 wins, 48 draws, 31 survives, 54 defeats, and apparently 2 resigns, which I didn't know I had until I actually looked at my rlumley statistics. But I think it's more fair if you only look at my current accounts statistics. I learned to play diplomacy on this site, and those combined statistics represent every game I've played. But at the same time, statistics early in my career were very bad, as I didn't fully understand the rules for a long time. One of these days, I may add all the statistics on "rlumley" to my spreadsheet too, but it would be a very time intensive process that I don't really feel is worth the effort.

So answering your question "in short" didn't really seem to work out for me, but I've provided you the data on all of my games, so you can judge for yourself. :-)