Dear pansparena.,
I do not doubt that you are a good player, but having 1200+ rating might seem a bit irrealistic anyway. Having such a rating means that according to your skill you should beat a player with 500 points 99 times out of 100 matches, as you can read it in the help section:
http://www.flyordie.com/games/help/chess/en/rating2_chess.html
The new system will try to sort out this problem by bring these people closer to the "mass", but I think it will be better for the so called "top players" as well, since they will be more willing to play with others (whats the point in having loads of points when you don't play?). Recently they mostly played amongst themselves, that's how their rating could stay that high.
The good players will still be above the worse players, only the difference will be less, which will hopefully bring the system closer to the original concept, that is, from the ratings one may know the winning odds of a given player against another.
There could be another consequence of this change, namely players will hopefully prefer use only one name then, which always should have been like this, since a player has only one skill level at a given game. Having multiple names with different ratings in a single game makes no sense for me.
Now, we are aware of the fact the system is far from perfect yet, but there had been changes of it in the past couple of times, and will probably be in the future as well. What we want to achieve with these changes is to get as close to the original concept as possible, that is, the ratings should represent the player's skill in the given game. Maybe your rating will decrease somewhat from now, but if you're good, you will still be amongst the best players.
OPERATOR