Confused with ship upgrade options

Really confused when it come to the outfitting of ship upgrades. I have a cobra and decided I wanted to upgrade FSD, I believe the current one is a C3, I saw one at a station which was A2 and as far as I can tell was no upgrade at all, the same confusion goes with the weapon upgrades as well.

I thought A ..B ..C ...D.. with A being the best

and 1 ..2 ..3.. 4.. with 9 being the highest, is this not true ?
 
The number is the size of the internal compartment which tells you what can fit in it, as a general rule fit the same size item as the slot.
In your example, your current drive is a C3 so you want to look at a size 3 drive, the A2 may look better at first glance, but it's designed for a smaller ship. More info here:

https://www.youtube.com/watch?v=UnA7nOvolFY#t=230
 
The letter is the rating, the number is the class.

Ratings are A (best) through to G (worst).

The Class is the "size".

Higher class items generally are better. So a Class 3, E rated item might be better than a Class 1 or Class 2 item with a rating higher than E. There is a nice chart here that shows this in a visual way (albeit for fuel scoops but the concept is more or less the same for anything): http://lavewiki.com/fuel-scoop#fuel-scoop-ratings
 
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