Before the Gothic Chess Prize Tournament (the $250 one) it was completely random. Now, i think it does someting like this:

The highest rated player is put into section 1.
The next highest rated player into section 2.
etc, etc (as many sections as there are)

I'm not sure if it keeps going like that to fill all the spots, or if it's random at some point, but if you look at some recent tournaments, you'll notice the highest rated players are generally at the top of the section, and the lower rated players are at the bottom.