One of the leagues I'm a part of holds a live draft over video chat and then we enter the draft results into our Yahoo setup. What started out as a paper/pencil kind of thing evolved into a simple web-based system where I (as commish) would quickly enter people's picks into a flat-file database, so you could "see" the draft in near real-time. The drawback to this system was that it was tough for me to both monitor and update everyone's picks while trying to draft my own team.
I created a new system this year which we're hoping to try out very soon (just need some help from the NHL). This new setup is an interactive draft board (web-based) where managers can make their own selections and see the draft board update in real-time. It's a very 'hands-off' approach which frees me up to focus on my own team building. At the same time, I can intervene if a quick change needs to be made. Below is the screen grab of our draft board for this season. If all goes well, I plan to add more features for next season. But for now, a manager is prompted when it's their turn to pick and you have dropdown menus that make sure you cannot draft a player that has already been selected. All of the league data is here too such as paying of league dues, old rosters, record books, etc.
Larger version that shows the details: http://www.leftwinglock.com/images/draftboard.png