Packerholic,

I would guess that at least 90% of the youth tournaments use seeded brackets. The actual seeding is done by the tournament host, based on information provided by the clubs. Almost all tournaments ask that the kids be ranked (A,B,C,D), and some also ask for years of experience.

It's not a perfect system, primarily because it relies on the clubs to be consistent and honest in the way they rank their wrestlers. Because of this, you do occasionally end up with unbalanced brackets; however, in most cases it tends to work pretty well.