NC-1701 is exactly right.
I used to be a teacher. I administered these tests, taught to these tests, had my pay set in part by these tests, etc...and I find most arguments against standardized testing 100% unconvincing. That isn't to say that the tests are great, or that these arguments do not exist (they do), but that most of the common arguments, especially here, suck.
First, re: the SAT/ACT. These are not meant to be content knowledge tests, but, as NC said, they're supposed to help predict and measure potential. Do you have the necessary foundational skills needed to be successful in college? History content won't help you, especially if you aren't studying history. Those foundational skills are reading comprehension (and assorted skilled), basic Algebra and Geometry (which really help measure logical thinking as much as they do the actual math stuff), and more recently, writing.
Is it perfect? No. The current tests are culturally biased and end up giving another advantage to the wealthy in the US. But given the immense variance between High Schools in this US (both in terms of quality and actual curriculum), having some sort of standardized exam play SOME role is about as fair as we're going to get without showing the stomach to really rip the whole system down.
The description of Value Added scores is mostly right, although it's tied to core subject matter mastery, rather than their ranks against each other. You test students at the start of the year in a fairly involved process (over a week, with multiple proctors, and with multiple styles), to get an idea for what grade level their knowledge base is (typically for reading and writing). You do this again 4 times a year, and chart their progress.
A kid might fail their final 5th grade exam, but if they came in as a 2nd grader and left as a 4th grader, that teacher still did a really good job, even if they still "failed". Value-added data is critical in helping us better understand not just classroom quality, but student achievement.
I actually think the tests given then are WAY better than typically end of year assessments/SAT type stuff, because they hit multiple levels of Blooms Taxonomy, whereas scantron tests typically don't.
I'll have more later.