The hat method is a good way to go. Yahoo lets you randomize and now they have an option that lets you have Yahoo randomize the order 30 minutes prior to draft time. This is nice for the sake of keeping the commish honest, but some don't like the fact they don't know where they will pick for the draft until the last second.
In my own league I randomize the order through Yahoo's randomize option, but I make sure as the commish I don't get the first, second, or third pick. This just keeps my conspiracy theorist managers from crying "shenanigans!" when I kick their butt.
Frankly I prefer to pick last in a draft for the sake of getting back to back draft picks.