Most items have a set number -- before the Scout update introduced the Sandman, no item went higher than level 10.
About the time of the Spy / Sniper update, there was a glitch in the random drop system, and normal weapons (that usually have a fixed level number) were generated with a random level between one and one hundred. This has since been fixed, so if you see, to use one of my own items for example, a level 56 Dead Ringer, that means the item is very old. (And now with the latest patch, you'll never see a non-vintage oddly leveled item)
On the other hand, hats will always have a random level. This means nothing, but certain levels are certainly more valuable for trading, for pure sentimental value. (1, 100, 69, 42, etc.)
The singular exception to all of the above is the new Dueling Badge medal misc item, which actually "levels up" as you kill folks during your duels. A level 100 dueling badge works out to 1000 kills (Might be off a factor of ten) during duels, and likewise the rarity of the badge itself (bronze, silver, gold, platinum) is based on level increment. 0-25,26-50,51-75,76-99,100, etc.
In no case does the level of an item have any effect on gameplay.
There are several server options that affect weapon damage in Team Fortress 2, and they're often confused:
Weapon Spread -- With this turned on, hitscan weapons, such as shotguns, will have the same non-random pattern of "bullets" each time they are used. Default is ON.
Damage Spread -- Each weapon normally has a minimum and maximum damage. No Damage Spread means that each weapon will do a set, average, damage rather than varying between attacks. Default is ON. (Critical hits always do 3 times damage)
Damage Falloff -- Normally, the damage dealt by a weapon decreases the farther away you are for your target. If this is turned off, A rocket detonating right next to you and a rocket shot from the opposite side of the map will do equivalent damage. Crits are never affected by Damage Falloff. Default is ON.
The default is to have Damage Spread ON. Nodmgspread refers to servers which have turned it OFF.
Best Answer
That is a track from a Crash Bandicoot party game called Crash Bash.
Metal Fox is the level where the song plays, hence the filename.