From 
SSB Wiki:
The #1 seed will be put against the #128 seed, the #2 seed against the #127 seed, and so on. For round 2, assuming that the higher seed won in all Round 1 games, the #1 seed will play against the #64 seed, seed #2 will play vs. seed #63, and so forth.
The bracket is set from the start, so should a player with a lower seed than his opponent win, he'll go on as if he were the higher seed. For example, if the #128 seed wins over the #1 seed in round 1, the #128 seed will then face the winner between seeds #64 and #65.
The seeding will be done manually by a panel of 
TDK, 
Finchinator, 
CZ., 
Genesis7, 
jacob, 
Tokyo Tom, 
d0nut and 
Reymedy. These players are well versed in the ORAS OU scene and have kindly agreed to help me out. Together, they will seed the signups perceived on skill level, taking into account how skilled they perceive each individual to be. These seeds will then be used to form the bracket.