Why it matters
Every application designer runs into isolation level issues eventually. Understanding what your DB actually does (versus what SQL standard says) prevents surprising bugs.
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The architecture
Read Uncommitted: allows dirty reads. Almost never used.
Read Committed: only committed data visible. Allows non-repeatable reads and phantoms.
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How it works end to end
Repeatable Read: reads see consistent snapshot across the transaction. Prevents non-repeatable reads. Postgres implements via MVCC snapshot.
Serializable: transactions behave as if serial. Highest level; often expensive.
Snapshot isolation: strict Repeatable Read. Not fully serializable (write skew possible).
Serializable Snapshot Isolation (SSI): Postgres's SERIALIZABLE mode. Prevents write skew via runtime detection.