jd,
That's a good question, people ask this from time to time so I may add it to FAQ at some point
The answer is simple: most of the time the highest bidder wins.
So if you bid higher then everyone else, then most likely you will be the winner. That's another reason to bid the maximum you want to pay.
There is one exception when bids are close to each other (within increment) or exactly the same.
In this case, the earliest of those two bids wins.