Razor, there are basically two different types (maybe more) of passaround. One is like the one you are referring to, where people sign up and are willing to pay 1/10 of the cost of buying the knife which will be raffled off at the end. These 10 people each use the knife for a week, and send it on to the next person on the list. Then at the end, the California lottery Pick 3 (or other state's pick 3) is used to determine who wins the knife. You are given a number from 0-9 based on the order you sign up. Then a date is set, and what ever number is drawn, the first number is the person who wins the knife. The benefit of this type of passaround is, any kind of knife or gadget can be used as a passaround as long as there is enough interest. You don't have to get a manufacturer to donate a knife. Also, it is a lottery where you buy a 1/10 chance of winning an expensive knife for little money.
The other type of passaround is usually manufacturer sponsored (or private person with a knife to loan). This type of passaround isn't as stringent on how many people sign up, but usually you only get to try the knife for 3-4 days max. You don't have to pay anything but the shipping to the next person. At the end of this passaround, the knife is sent back to the manufacturer (or knife dealer).
The current passarounds done by Steven Roos are ones where you pay a portion of the cost for a 1 in 10 chance of winning the knife in the end. The one held recently by NewGraham for an Al Mar Shrike is a no fee passaround, but the knife goes back to NewGraham at the end. Another going on right now is hosted by DaveH where he is letting people use his personal Cammillus EDC for 3-4 days each. This is his personal knife, and he is just generous enough to put it up as a passaround knife. In the end, it will go back to him. There is also talk of raising money to buy a Sebenza to be used as a permanent passaround. Basically, a handful of people will have to pay a small fee like $5 or so, and will use this knife for a few days. In the end, the money that was paid will be used to refurbish the knife by Chris Reeve Knives for the next passaround. This hasn't happened yet, but is a very good idea to allow people who aren't familiar with the Sebenza to try one for very little cash to see what all the hype is about.
Hope this helps,
Mike