Any time kids at my school were in a race to get somewhere, the winner would be taken down a peg with the following:
"First is the worst,
second's the best
third is a nerd
in the polka dot dress"
A few years later, when my little sister learned it, her friends had changed the last couple of lines to "third is the BEST in the polka dot dress" (the fact that second was already the best didn't bother her in the slightest, no matter what I said). The person who came in first would, before anyone could claim otherwise, recite the rhyme starting with "Zero's the hero." This line was unknown to me until my sister and her friends started using it.
She and her friends didn't invent this, of course; even the "zero's the hero" bit has been going around for years. The "third" in other versions was often "the hairy princess" or "the one with the hairy chest."
Some appear to have gone even further, adding in "fourth is the king, fifth is the queen, sixth is the one in the washing machine. And, of course, there are LOTS of variations in the comments. Really, the comments to this one have gotten absolutely out of control.
As to how old it is, well... one version appears in a book of “New England Sayings” from 1894:
First’s the worse
second’s the same
last’s the best
of all the game
So it's at least a century old, but I have to imagine it can probably be traced back beyond that. Variations go back way further see more in the ebook: