Frats

Now, I can't admit to knowing much, if anything, about American university "Fraternity Houses" - I understand they're like big clubs for rich poncey people (sorry if I've offended anyone, I might be wrong on this count). The thing I find very strange is their use of Greek letters for their names. What's that all about? This morning someone jogged past me wearing a T-shirt that said

"PSI UPSILON"

This must be one of the lower class of frat houses, I mean, 'upsilon'? No-one uses that letter for anything, surely?