Stage 1 is where you use stock pistons, low amounts of boost, usually no intercooler, waste gates & dump valves are simple design.
Stage 2 is where you use low compression pistons, lots of boost, intercooler, more adjustable waste gates & dump valves, bigger injectors, new ECU & stuff like that.
Stage 3 is race bred, not supposed to be street legal, low compression pistons, reinforced internals, huge amounts of boost, intercooler, computerized waste gates & dump valves, aftermarket fuel delivery system & ECU, custom exhaust.
In a celi:
Stage 1: About 60HP gain.
Stage 2: About 140HP gain.
Stage 3: 200+ HP gain.
Anyway, thats my understanding of it.