The NFL states:
The compensatory picks [are] positioned within the third through
seventh rounds based on the value of the compensatory free agents
lost. Compensatory free agents are determined by a formula based on
salary, playing time and postseason honors.
These compensatory picks are placed after a given round (3-7). If 32 picks are not awarded using this "formula," it will be added onto the end of the draft based on draft order as if an "eighth round" had begun (only seven rounds are used, picks that fall into this category are added on to the seventh round).
For the 2012 NFL Draft, one compensatory pick took place in the third round (Round 3, Pick 33 ... Pick 95 overall), eight in the fourth round (Round 4, Picks 33-40 ... Picks 128-135 overall), three in the fifth round (Round 5, Picks 33-35 ... Picks 168-170 overall), six in the sixth round (Round 6, Picks 33-38 ... Picks 202-207 overall), and 14 in the seventh round (Round 7, Picks 33-46 ... Picks 240-253 overall).