Even that description's a little misleading. You don't lose a ball "for every" playoff appearance or first overall. Essentially there's two criteria:
1) Missed the playoffs in each of the previous 3 seasons.
2) Didn't have the 1st overall selection over the last 4 drafts.
If you met both criteria, you got 3 balls.
If you made the playoffs only once
OR had the 1st overall only once, you got 2 balls.
If you had two or more of any combination of those two (playoff appearances or 1st overalls), then you only got 1 ball.
http://www.nhl.com/ice/page.htm?id=26401
Thanks for starting the thread though; it'll definitely be useful with all this lock-out talk flying around.