Other than your rating, which is really nothing more than an indication of your strength in the current mix of players, there's nothing to tell you whether you are "getting better or worse".

If you don't play at all, there's no way to tell if you are a decent player or not.  i.e., you have NO rating, instead of a low or high one.

Theory is good, and memorization is good, but getting to a desired level (for example, 2000) is something that requires making the right move, at the right time, all the time.  I picked 2000 as a good, but still arbitrary number, since players of this calibre are very hard to beat, even for other 2000-strength players.  Sometimes the "best move" becomes a matter of opinion at this point, and the website, magazines, and books are full of GM's arguing the merits of one position or another.

As far as understanding your skill level goes, there is nothing that screams out to me that you are, "a very new player or not very good".  And I see that the crux of your question is whether putting effort into understanding Chess will pay off for you at this late stage.  I tend to feel that I will learn something new every day, and that I still have plenty of time to get to a high level.  In spite of this, I try to enjoy every game I play just for its own sake, and don't obsess too much about whether I really am getting better.

I tend to believe that there is a magic point at which the game starts to make sense on a deeper level.  There are also more than one level of deep understanding as far as this phenomena goes.  Some players can play very few games, and win all of them, while others play constantly and still can't make heads or tails of it.  I find that I continue to play the amount that gives me the greatest enjoyment.  The day when Chess is no longer fun is when you will stop playing.

So yeah, I'm definitely on the side of the fence where I believe strongly in playing the game for its own sake.  I've had some nice breaks lately and some hard-fought games.  Win or lose, I would choose playing over not-playing any day!

I appriciate your thoughts Niven, unfortionatly I think you misunderstand my points and skill level. #1 is that if you look at my rating number you would think that I am A: a very new player or B: that Iam not very good, these could not be farther from the truth, if you look at my timeout number you will see that I have had 20% of my games where I ran out of time. the reason for this is that I was having a hard time keeping up with my games and then quit playing for awhile and my rating suffered for it. Now I am probably at the point your talking about and if I would not have timed out so much my rating would probably be int the area of 1200 to 1400.

But one point you make is the reason for me having a problem with. You said  to memerize ten moves into a opening. But is this the point of chess, in a game is it the person who has played more and memorized more who wins. Could you take a opening and play it so much and memorize the moves so that you know every counter move and could esentially win every game. And with the masters and grand masters is it not who memorized the most positions that wins the most. Are they just another chess computer or is there more to it.

And this is the point, could you just read alot of books and study a lot of games but not play and still be a top rated player?

There's a lot of blogs, sometimes it takes people a while to read through them and respond...

I was a much better player when I was younger, and I don't know what happened as I grew older - perhaps it was a fear of taking risks.  I know that I was able to improve greatly just by playing, and that I also learned a great deal from the Tactics Trainer, the Chess Mentor, reading every Chess book I could get my hands on, and by playing through the tutorials on Chessmaster.  It is definitely an ongoing process, and while I have improved a lot, I would like to get about 200 points higher than what I am now.  I know it will take a lot of work.  Most of it is memorizing just a few key positions.

The number one advice I would give a beginner is this:  learn 3 openings for white, and 3 for black, and stick with them in every game.  Get familiar with them to about 10 moves deeps, where you can make all the moves without having to think about them.  Know where all the traps are in case your opponent won't play along with your desired course of action.

This little piece of advice will take you from sub-1000 to over-1000 in just a short time.  Plus, you will gain confidence in the opening.  Don't expect to beat better players right off the bat, but you will occasionally get to carry out your pet openings, leading to wins against players that make mistakes or run out of time.  It's a start!