The setup is exactly the same as a Booster Draft. Unlike a Booster Draft, however, the players don't play with the cards they draft. Instead, when players are paired with one another, they switch card pools and build from the other player's pool!
How does this affect play? It means that you actually want to draft the worst deck possible! This can lead to hilarious results as typical draft considerations like power level, color cohesion, and mana curve all go out the window. The format is also surprisingly skill-testing, since you have to wildly reevaluate cards on the fly, then face the challenge of building a playable deck out of a card pool picked to make doing so as difficult as possible.