Question: So far in Dead Island I've noticed white, green, blue, and purple items. These seem to indicate different rarities, similar to the classification system used in Borderlands, but I don't know what these colors actually mean. Is green more rare than blue? What are the different rarity colors?

Answer: 
So far, here are all the colors I've found ordered in quality (based on overall stats when compared to one of lesser color and also how often I see weapons of that color):

white->green->blue->purple->orange

The in game text during loading says that some of the quest rewards gives you unique weapons, and (assuming Gabriel's Sledgehammer is a unique), it is still an orange colored weapon. So I'm going to assume that even unique weapons are orange. I've also found a Master Chef, which was also orange.

[This link](http://www.g4tv.com/thefeed/blog/post/716093/dead-island-weaponsmods-location-guide/) seems to back up my answer.
Orange are the super rare or legendary weapons. Purple are rare, blue and green are rare but tend to be less rare than others.