I am the developer of PerfectTablePlan. I post here as well as Joel's Business of Software . ;0)
Combinatorial problems, such as seat assignment, are quite nasty algorithmically. NP-hard in fact. The number of ways to seat 60 guests in 60 seats is 60! (60 factorial) and that is more than the number of atoms in the known universe.
PerfectTablePlan allows you to specify that A must sit next to B, but nowhere near C. It uses a genetic algorithm to automatically the assign seats. This works pretty well in practice - it will usually find a decent solution for 100 guests in a few seconds. You might need to make a coffee for 1000+ guests. In practice some drag and drop fine-tuning is also usually required to cope with the vagaries of local customs and family politics (Uncle Bob is a bit deaf, we had better put him nearer the top table).
You can find out a bit more about the genetic algorithm here.
Ps/ The automatic seat assignment is only a small part of creating a good seating plan. See the PerfectTablePlan tour and the tips page for more details.