The draft is done by league. Each league will have 48 players, which each team can rank from #1 to #48. When the draft is actually done, the first team to draft (the team with the worst overall record) will take their 1st pick. The next team will take their highest remaining choice, and so on. The same draft order is used for the 2nd and 3rd rounds.
The actual draft is at the very start of the new season, but is based on the previous season's league, prior to any promotion or relegation. Draft order is based totally on regular season record and does not take into consideration which conference a team is in.
Each team is given limited information based on its scouting. You can think of the scouting that you do each week as the scouts watching some college players and sending in their report, which gets immediately filed in a filing cabinet, because you are too busy with the regular season to look at it.
Around the end of the regular season you will be able to see the draft list. There will be 48 players on it, numbered #1 to #48. The numbers are random, so your #5 might be another team's #7, or another teams's #36, so it is quite difficult to share information.
Each week you add to the count of scouting reports. A player on your draft list can have 0, 1, or 2 scouting reports. Let's say you had 30 scouting reports. You might have 2 reports on 8 players, 1 report on 14 players, and 0 reports on 26 players. Because they are randomized, each team will know about different players, so there may be only 4 or 5 teams that know about any particular player.
The first scouting report is a number from 1 to 5, and a best position. There tends to be a lot more 5's and 4's than 1's and 2's, so this doesn't tell you too much other than to avoid the 1's and 2's. They get pushed to the bottom of my list, since it is likely that the player's that you know nothing about will be better.
The second scouting report will be a grade (5's will get either an A+, A, or A-), a potential rating (from 1 to 5), and a box score from one of the player's games. Some of these are informative (like a player who had 18 rebounds is probably a good rebounder or mayber 8-11 for a good shooter), and other will be pretty worthless. AFAIK, if a player is 1-3 has 2 boards, and 1 TO it doesn't necessarily indicate a player isn't very good or a role player, but just that he didn't have a good night when he was scouted.
Overall, the players are pretty good. They are 18 and 19 and generally comparable to the players you start with. I've had draftees move right into a starting position with no training, and currently have 5 draftees on my roster (from 3 drafts).