Ok, to answer your question you have several methods of getting gear.
1) PvE questing. This will give you shiny greens and blues for completing missions. (Feds only)
2) Random drops from PvE. This will sometimes give you something you need, sometimes stuff you will sell on the Exchange, and most of the time it's vendor trash. (Still mostly Feds only)
3) Exchange. Spend your cash on those overpriced greens and blues that dropped from other people.
4) Badges of Exploration. Do the exploration quests, get badges, spend them on gear. Badges are applied per tier.
5) PvP gear. Badges are applied per tier.
6) Crafted upgrade gear(Feddies, I'm looking at you again here)
Feds have the most choices here, as they have every method available for getting gear. Klingon gear is basically all PvP, though if they want to grind the same nebula forever they can get the exploration gear.
Just go by the colors...white, green, blue, etc. Generally speaking, any blue gear in a given tier will be superior to any green gear.
From what I've seen (full disclosure, I've only seen through T4 Fed and Klink side), the best gear I've seen for given levels is the Fed PvE quest gear because you get easy blues if you do the right missions. The next best gear is the stuff you get from exploration or PvP badges. And then your drop gear is consistently mediocre whites...except for the time the ultra rare purple drops.