Same way you differentiate between different stuff in the same class--quality, style, that sort of thing. I've never worried about that part of things, though, because the jump from "no suit" to "well-fitted suit" feels bigger to me than "well-fitted suit" to "well-fitted, expensive suit", and I mostly wear one because I like them, so I haven't indulged.

By comparing the quality of your respective business cards of course.

Watch I guess, Patek trumps Rolex and so on...

There's few things that make a worse first impression on me faster than someone wearing a watch as a status symbol.

How would you know, unless you were making an effort yourself to check out their watch? And knew which watches were status symbols?

Depends how expensive the watch is. If it's a $100K watch, you can be fairly sure they have money.

Watches. Tag < Rolex < Audemars < Patek. Or shoes, or quality of suit, style, age, companion, car, etc...

No one recognises the higher end. Sure people notice a Rolex, TAG or Breitling but, in 10 years I can not remember anyone commenting on my AP.