Seeding or Placement on works by rating the participants of your tourney. When generating the brackets or groups, the site will then automatically pair the top rated participants against the lowest rated participants.

For an 8 player bracket, the first round would look like this:

1st vs 8th, 5th vs 4th, 3rd vs 6th and 7th vs 2nd

Random Seeds and Seeding Groups:

If you assign the same rating to 2 or more participants, they will constitute a seeding group and their placement will be randomised within that group. For a completely randomised bracket, simply assign the same rating to every participant.

Placement for a Group Stage or League:

Normally, will pair top and bottom seeds into the same group, as to make sure all top seeds have a fair chance to reach the play-off stage. If you want full control over how the groups are generated, you can use the Use Seeding Groups option in the Groups select box. This will put every player from Seeding Group 1 into Group 1, from SG 2 into Group 2, etc.

Automated Seeding:

If you use long enough and have a number of participants that sign-up to your tournaments regularly, you can tell to create a ladder based on the results of your tournaments matches by selecting a game. The big limitation to this is, that it will only work if at least most of your participants have a account.