The NHL first began to get their teams together to draft unallocated players back in 1963. It was originally called the NHL amateur draft and used to draft any unsigned non-professional player. The NHL teams have always drafted in the opposite order of their finish in the previous NHL season. It has been used as a method of equalizing talent levels in the NHL and providing every team with the opportunity to share the available talent.
By 1979, the amateur draft was ready to become the NHL entry draft. Professional players from the defunct WHA (world hockey association) were included in the draft. The draft had been modified to include all amateur players between the ages of 18 to 20. Older players from Europe were eligible to be drafted as well.
By 1980, the draft was a public event, and not long after it was televised.
The NHL entry draft has become a means for ensuring the opportunity for bad teams to get better.
Having the No. 1 pick in the entry draft is becoming more and more important. A recent BR article highlighted the fact that the last 15 first overall picks have all had significant NHL careers. That wasn't always the case: http://www.nhl.com/futures/firstoverall.html.
This is my list of who I think were the 20 best No. 1 picks of all time (1963).
Special thanks to hockey data base (http://www.hockeydb.com/) for the career statistics for each of these former No. 1 overall draft picks.