In the NBA, all teams which miss the playoffs are entered into a draft lottery with their chances of winning the first pick in the draft being tied to their final record. The worst team in the league has the highest chance of getting it and the best team that missed the playoffs has the worst chance. Only the top 3 draft spots are determined by the lottery. After that, the teams are seeded according to their record, worst to best.
At the draft, each team is allowed to select one player who is applying for entrance into the league when it is their turn.
A protected pick is a pick which has been traded, but only if a certain set of criteria are met. For instance, if a pick is top-10 protected, that means the team who originally owned the pick gets to keep it if the pick ends up being in the top 10. Since picks are often traded for future years, a team does not actually know what pick they'll hold when the trade is made. Usually, there is a time frame, such as Top-10 protected through 2011 and then unprotected after that. In this case, the team will hold onto the pick every year as long as they pick in the top 10. If they ever pick 11th or higher, or 2011 arrives while they still own the pick, the team they traded the pick to will receive the pick.