Good stuff from wsut, just to add to it -- IQ improvement is not linear, so players move from F to D quicker than they do from, say, C to B. The higher (better) the IQ, the longer it takes to get to the next step up. In general, even if you bring a kid in as an F, with 20 minutes of practice in defense, they will be an A by the time they graduate.
Bringing in a kid that knows your Off/Def helps. If you can start at a C/C- you'll be about half a season ahead of someone that comes in at an F (again, based on 20 minutes). In addition to the coach's call (which is the cheapest way to get an idea if the kid fits your system), also pay attention to what your scouting trips say -- this will give you an idea of whether a kid's knowledge of that set is good, average or bad (good could mean he comes in at a C..."he looked lost out there" might mean he'll only come in as a D).
Definitely pay attention to IQ if you're running a press defense. Low IQ = high # of fouls...not good. The effects of IQ on offense are a little harder to pin down, but lower IQ seems to lead to higher TO's (which would make sense...)