This sounds a lot like the Single Transferable Vote system that some of us are pushing for in Canada. Same principle, you rank all of the parties that are acceptable to you, and your vote is applied to the first candidate who isn't eliminated.

This way, if I want the Green party, and am willing to settle for Liberals, but can't stand the thought of a Conservative win, then I can support my favorite party without risking a split vote that lets the hated party squeak in with ~38% of the vote. Naturally, those of us who vote for fringe parties are strongly in favor of STV, and those who benefit from split votes complain that it is too complex for the average voter to understand.