Kieran, you're talking about different things.
1. FIFA rankings are simple: based on games won/drawn/lost over time. This is why Brazil is currently ranked number one in the world, Spain number 2 etc: they have the best and most consistent performance. Here's the current world rankings:
http://www.fifa.com/worldfootball/ranking/lastranking/gender=m/fullranking.html#confederation=0&rank=193
They are not based on opinion, they are based on the results of international games played. As you see, Ireland is ranked 41 in the world right now - and as a matter of interest, 22 UEFA (European Federation member) teams are ranked ahead of Ireland - which means these 22 have performed better over time in internationals than Ireland.
2. For participation in the World Cup the host nation (South Africa this time) is always granted automatic qualification, with the remaining 31 finals places divided among the continental confederations:
13 places go to UEFA (European teams)
5 to CAF (African teams)
4 to CONMEBOL (South American teams)
3 to AFC (Asian teams)
3 to CONCACAF (North and Central America and Caribbean teams)
The remaining two places are decided by playoffs between AFC and CONCACAF and between CONMEBOL and OFC (Oceania).
This system is agreed to prevent for instance a tournament where ALL 32 of the participant teams would be from Europe or South America, with NO TEAMS from other parts of the world, who might be disqualified due to low overall international performance and low ranking. It's to ensure a truly international tournament.
Teams play qualifying matches to win participation. UEFA teams compete against all other UEFA teams to qualify for one of those 13 places, and if you don't qualify then you're out. Ireland was effectively bettered by more than 13 other European teams at the qualifying stage. It's all very well complaining about the unpenalised handball from Henry in a qualifying match, but if Ireland had won all its other group matches for qualifying then that wouldn't matter, would it?
BTW Algeria's overall FIFA ranking is currently 30; Ireland's is 41.
