You never know when things will change, but the way it worked last year I do know.
There will be like 30 or so events.
You are given the choice to rate 1-5. I forget if one or five is the top rated event of your choice.
If you rate the event as your top choice, it will be given highest priority during the first pick. Not a guarantee (see below).
Every batch of draws chooses people randomly, taking their first priority if still available. There are some events like playing with Jason Bulmahn that are extremely limited. There are only 6-8 seats to his game. The funny thing is, the draw may pick 30 or so people until it picks a person that wants to get into Jason's game. Remember, it is picking only from your highest priority of your list (and if that is met or impossible it goes on to your next highest). Once Jason's game is full, it no longer takes a person's choice if they chose Jason's Game. It moves on to a the person's second choice during this first batch of picks. Having completed a first batch of picks (everyone gets something picked), it then starts the process over again going down everyone's priority lists until they are either fulfilled or unable to accomodate.
It is possible to get absolutely nothing with your choices.
If you choose, 1. Jason Buhlmahn's Game, then 2. Eric Mona's Game, 3. Sean K. Reynolds Mini Painting Workshop, 4. Lilith's Game, 5. Wes's Game.
In the above example if you made these choices, you are really rolling the dice. Most of them can only take 6-7 people. If for some reason all these events are randomly filled before it gets to you on the first pick, then you get none of those. However, even if you rate an event as your lowest choice, you will still get something that first draw. It may have been at the bottom of your choices, but it will be used for the first pick.
You might think that putting everything as a "one" for your priority list would give it the highest priority, but in fact it makes your choices all the same in importance. Truly random. When you prioritize your selections, the picking for the first batch uses your highest priority first and then heads down the list if it is full.
You could have two or three "1s", like the games mentioned above so the computer could pick among those types before moving on to your number 2 choice.
If you are absolutely dying to get into a particular event, than give it your highest priority number. Multiple (same numeral) high priority numbers will just make that a random choice among those top numbers.
After the computer went and gave everyone their events, there were a few people that were really unlucky. I mean, bad unlucky. So, there was another date set for a second lottery. This was a lottery to choose between the remaining events. It went just like the above lottery but I think there was something different about it. I think the real unlucky folks got some priority or were given something as a compensation. It might have been a closed lottery just for them, I forget. They then opened up the lottery for a third time to fill up events.
Just so you know, the lottery is for an official seat at the event. However, if that seat is vacant you may attend the event. There was also people standing in certain events.
Advice?
If you want to game with the designers, make it your number one choice. They are the most sought after events at PaizoCon and most likely the one you won't get into. Best bet, choose multiple first choices for all the game designer games.
That is how it worked last year.