I have used this one time and it was great. You randomly select the order (using a randomizer, pulling numbers from a hat, etc.), but instead of just straight draft pick you set the draft picks by division. So a 3 team league would like this
Division A
Picks 1, 4, 7, 10
Division B
Picks 2, 5, 8, 11
Division C
Picks 3, 6, 9, 12
That way the person who gets #1 can then select what pick they want and would also be placed in the appropriate division. The 2nd guy can then say, I want to be in that guys division and pick a pick that puts him there, or he can go for the best available pick.
Adds a slightly different element to the pick process, especially if you believe there isn't much difference between being 1 or being 2 or being 3 in the draft, whereas the division might matter more.