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You raise level by crafting badges from complete trading card sets.
You dont need to own the game to buy the cards for a game on the community market.
Crafting badges from cards is the only way to raise your Steam Level after the first few you get from the Community badge.
Each crafted badge gives you 100 exp. From Level 1-10 you need 100 EXP for a level up, from 11-20 you need 200 exp , from 21-30 you need 300 exp per level and so on.
On the positive side, there's no actual benefit from having Steam levels.
Yes. If it says "x card drops remaining", you can earn those cards for free by simply having the game running. (Note that the card drops DONT refill. In other words, you get "x" and that's it. If you want to craft a badge for that game, you have no choice but to trade for or indeed buy the ones you still need.)
Probably the cheapest way (although *really* not the fastest!) to get game badges is to grab the free card drops from several games you already own, then trade the ones you dont want/need for ones you do need. Note that those card drops are rather slow and random. Sometimes it takes 30 minutes before a card drops. If you consider that those cards (assuming they aren't the super-rare "foil" versions) are worth a couple of cents.. it would be a far better use of your time to just go and get a job, earn a few bucks, and then BUY the cards you want. ;)
Thanks for the reply thats the sorta answer i was lookin for, thanks mate :)
edit: on a relevant note just moused over your profile and you're level 50, no wonder you recommend that.
do you know any websites that do this (real ones not those bullcrap ones that say they do and waste like 5 hours)