Originally Posted by SavagePenguin
The original button is chosen at random.
The person on his immediate left is the small blind and posts half the minimum bet.
The player to the small blind's left is the big blind, and posts the minimum bet.
At most live games I've played in people either draw cards for position (Ace through 9 or 10, with the ace being the button, 2 being the small blind, and 3 being the big blind) or you draw a seat number, with #1 being the button, #2 being the small blind, and #3 being the big blind.
In the next hand everything shifts one position to the left (clockwise). The person to the left of the big blind ("under the gun") becomes the big blind, the big blind becomes the small blind, and the small blind becomes the button.
Rush poker is an exception. In that case, the computer looks for who at the table hasn't posted the big blind in the longest amount of time and makes that person the big blind. The person to his right is the small blind, the person to the small blind's right is the button.
^^^THIS^^^ Pretty much that simple not complicated at all.
Now if by chance your playing cash or a tournament and the dealer puts the button in the wrong position and at least 2 people have acted on their hand the hand contiues til the end, then the button is put in the position that it was missed for 1 hand then put in the correct position.
EX: seat 3 is button seat 4 is SB seat 5 is BB the next hand the dealer puts the button in seat 5 and 2 players act on their hand before they realise its in the wrong position play continues til the end then next hand button goes in the 4 seat then after that hand button goes to the 6 seat.
Ruling from Robert's Rules of Poker
1. In button games, if it is discovered that the button was placed incorrectly on the previous hand, the button and blinds will be corrected for the new hand in a manner that gives every player one chance for each position on the round (if possible).