Its simple. First you make a character BIO. All the info of your char you can imagine. Then you challenge someone to a match (can be direct or just plain anyone.)
Then when you got an oponent the refferee tells you the location and maybe some other info. After that you do 1 post of smacktalk and start writing up the story. Whats important is that you dont end the story in the first round.
Basically you write a part of the story and your oponent does the same. Then the winner who is determined buy the reffs call gets to have their version of the story come true. And you both have to continue from where you left off. Same goes for round 2 and possibly round 3.
The system is best out of 3. So first to win 2 rounds wins. If you allready won one round you can write an ending for the story if you wish to do so. But you must not kill your oponent unless you have more experience points than him (not sure how much more exactly)
As for the judging. Its up to the judge himself. Some will give your writing and grammar more atention and others will give more points in regard to flow and details.
Thats about it.
The last match was me VS clen. Though we only went 1 round before he forfited due to technicall issues with his PC breaking. ->
http://forum.esforces.com/so-are-matches-still-possiblei-t75029.html