The simplistic approach is that it follows the blinds around the table.
On many poker websites, they argue that this is not the case. In particular because it gives certain players additional shots at being last to act when there are dead dealers etc. (ie the last dealer gets to effectively be dealer twice).
For example http://www.learn-texas-holdem.com/quest ... st-out.htm
This website (and yes I know it's not the authority on poker - but an interesting viewpoint) talks about the importance of positions being summarised in this priority:-
1) Big blind goes around fairly
2) Dealer button goes around so players dont get additional shots to act last
3) Small blinds make up the gap where they can.
I'll sit on the fence with the above, but what makes it interesting is that instead of getting a dead dealer - its sits on the next small blind. This way the former dealer doesnt get to act last twice. I guess in many ways it's what heads up does anyway. It's an interesting alternate view.
And then I read the interpretations of the rules on transition from three players to heads up play when the dealer busts out.
-3 player seating:
Dealer / Small / Big.
-Dealer gets knocked out.
-2 player seating:
Big (next in turn for big) + Dealer (second priority is the button)/ small
-next 2 player hand:
Small Dealer/ Big.
I don't necessarily agree with it, and by now your thinking what the crapola am I talking about?!
If you are bored check out the site - I'd like to know your opinion