No processor design is perfect. The first version of a new microprocessor product is the A-0 step. Later, as improvements are made to the product for functional (bug) fixes or manufacturing improvements, the stepping number will increase.

Generally speaking, minor changes result in an increased number, (that is, A-1 to A-2) while more complex changes result in the letter being changed (that is, A-2 to B-0).

If new steppings come out with fewer bugs you are usually not eligible to RMA for a newer processor. Most of these bugs are supposed to be worked around in the motherboard design, BIOS (drivers), and applications.

Intel produces a detailed document called a "Specification Update" for each of their processor models that covers all of the various steppings, and lists exactly which bugs (they call them "errata") each one has and a description of the bug. For example you can download the Pentium IV specification Update from Intel at http://developer.intel.com/design/pentium4/specupdt/
A similar document is available for every processor they make.

AMD uses the term "revision numbers" to refer to steppings for its Athlon and other processors. To see the errata for a given AMD processor, look up its revision guide, which lists the processor revision numbers and the errata which apply to each revision. For example, the revision guide for the AMD Athlon XP model 8 processor is available from AMD at
http://www.amd.com/us-en/assets/content_type/white_papers_and_tech_docs/25703.pdf