In Auto-Pick drafts, you can either pre-rank your players or have the website do it for you.
The players are picked in order of their rank on the pre-ranking. If a player is taken by a team, he is crossed off on your list and the next best player available is taken for you.
However, the auto-draft takes into account the positions it picks and picks only to fill up your active roster first, then to fill up your bench. (ie., If it chooses Peyton Manning for you in the second round, when your turn comes up in the third round, if the highest ranked player not yet chosen is a Quarterback, the computer will skip over that player and go to the next best player to fill your actives list.)
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There are two main types of drafts. The first is the snake/serpentine draft. This is where the team who drafts 1st in the 1st round would draft last in the 2nd round. This would continue every two rounds. This is used so drafts remain fair. The second type is the auction draft. Each owner is given a budget (imaginary). Then a player is selected and each owner bids for the player, like an auction. The highest bidder gets the player, taking the amount he spent on the player out of his budget. This process is repeated for every player.