HGG Community Forums

The levels for mares are Failed, Yellow, Red, Blue, and Gold, where the levels for stallions are Showable Only, C, B, A, and Star. If any horse tests Failed or Showable Only as a foundation, they'll be automatically altered.

To do the best you can, try breeding only corresponding papers together, like C/Yellow, B/Red, and so on. These foals are more likely to get through the tests (which compare the quality of the foal to its parents'. If the foal is significantly worse than either, it will be altered), and so will further your lines. This is what most people mean by breeding evenly, although it gets mixed up with generation numbers.
The paper levels don't cover an equal range of qualities. Using definitely inaccurate numbers, if C/Yellow covered 1-10, B/Red covers more than 10-20, and A/Blue covers more than 20-30. By Comparing Stallions (this test takes cash, hoo yes), we can tell that it takes a bigger jump in quality in a single generation to go from a B to an A than from a C to a B. Adding to the test, when you breed a pasture of foundations, it's easy to get a lot of B's and Reds, but when breeding a pasture of 2nd generations, As and Blues are a little rarer.
My standards for pasture qualities by generation, for instance, are as follows:
2nd gens: B's and Reds
3rd gens: A's and Blues
4th gens: A's and Blues again
5th gens: Stars and Golds.
After that I haven't figured it out yet, but the papers don't go any higher.
It's very difficult to get 4th gen Stars and Golds, but I've gotten a very few. This timeline takes a lot of comparison (if you do this, make benchmark studs for each generation to test against, trust me!) but it isn't necessary to playing a good game.

A note on ExPros: they effectually start out a generation's amount of quality ahead of regular foundations, so their progression of generation papers should be bumped ahead. When bred to regular foundations, their progeny likely won't pass, but it could be better than a normal 2nd gen foal. It wouldn't pass because it wouldn't test as well as the ExPro parent.

Anyway, enough of my late night tired brain rambling. Breed your ponies however you want, it's your game. :P

Here is the FAQ about it.
http://hj2.huntandjump.com/faq.php#70