Let's use X-com as our example canon, Enemy Unknown, of course. If there was a hypothetical fic where the sue in question is a squad member, I would look largely at ease of success. In X-com, tactics are everything. Good tactics can let a recruit (Accuracy of a Stormtrooper + life expectancy of a redshirt) wipe out a squad of mutons (quarter-ton slabs of bulletproof muscle), as long as you're very lucky, and very clever about fighting them.

However, if the sue just walks out into the open, guns down three mutons, and then destroys a sectopod (Huge, well-armed brick powered by pure spite) without even getting close to dead, that is a pretty clear-cut example of someone being overpowered. So, what about a more ambiguous example?

If the sue in question does the same thing, but is not a recruit, and has at least mid-game equipment? A bit more reasonable, as I have had my own soldiers do even more insane things before. The moral of the story?

If the sue in question does everything to stack the deck in their favour, and gathers intelligence, fights like a massive cheap-shot and gets lucky? Well, then it might not be a sue we're dealing with, but rather, a perfectly reasonable character given the circumstances. In that case, the over-poweredness might be intellectual, rather than physical. After all, bringing a gun to a sword fight will ensure your victory, but you'd need to know it WAS a sword fight, or something similar enough, ahead of time to prepare.

In short: If they fight like Superman while still being weak, than it's a sue. If they fight like Batman, it's a bit more reasonable, but you should always be on the lookout for Mary Tzu type characters.

And he was certainly a very weak character defeating a very strong one.

Oh, yes, he had help. Sam, plus a couple of armies. But in the end, it was a couple of hobbits versus Sauron, and the hobbits won, mostly because Frodo was too compassionate to kill Gollum when he had the chance.

So here's your benchmark. Yeah, Frodo can defeat Sauron, but he had better try pretty hard doing it, or think hard, or face obstacles that matter. The world has to stay consistent.

Being overpowered, by itself, isn't the fundamental problem. Being able to easily overcome obstacles is the real Sue trait. It's often done by giving a favored character unrealistically strong abilities, to the point of Godmode!Sue, but some Sues weaken the characters around them, making them incompetent, instead of making themselves stronger. Others simply take over doing all the important things, even when it's a canon character's specialty.

It's possible to write a character with extreme powers, in a world where no one can match them, and still write a good story. The conflict simply has to come from another angle.

If you're looking for "overpowered", I think the best way is to ask yourself, "Are these characters facing obstacles that have, in one way or another, been made so trivial that there's no challenge? Are the obstacles merely there to make them look good?"

Can the Sue in question brush aside these ridiculous canons... without doing the whole rigmarole of what you describe? Do they beat the greatest without effort? That, I think, is what you look for in a continuum like this. Effort. =]

Apologies for the brevity, old spot, but I'm on my mobile. =]

For Touhou, overpoweredness comes when they ignore the Spellcard Rules and make impossible bullet patterns or something.

Of course, one wonders what would happen if one were to remind a Touhou Sue that spell cards have to actually be possible.