Satellite orbits around the Earth are not the perfect ellipses from Newtonian mechanics. The oblateness of the Earth, the irregular gravitional field, atmospheric drag, the pull of the Moon and Sun, and solar light pressure all effect satellites. Accurate models take into account these perturbations to predict where a satellite will be and what path it will follow. Models add extra parameters such as a drag coefficient to the element set.
When orbital elements are generated from observations a particular model is used. The elements released are the mean elements and are meant to be used with a particular model. Blindly converting to a different format or using a different model results in decreased accuracy. The most accuracy is achieved when using the same model as used to generated the elements.
The accuracy of element sets also depends on time. The perturbations change the orbit in non-predictable ways over long periods of time. This means that accuracy of the predictions from an element set decrease over time. The most accuracy requires getting fresh element sets. Atmospheric drag is the least predictable factor. This affects lower satellites more and makes their orbits less predictable which means that the elements need to be updated more frequently to be accurate.
The elements released by NORAD use the SGP4/SDP4 model. It is the most accurate model in public use.
The SGP4 and SDP4 models as well as the older SGP and SDP models are described in the Project SPACETRACK Report no 3: Models for the Propagation of NORAD Element Sets. It is available in PDF and LaTeX versions. You can also get it from celestrak.com.