This would work well in MLB since there are fewer playoff teams. It would only apply to the first round but that's where it would do the most good in making the playoff structure reward regular season performance since the first round is only five games. A best of five series is more prone to an upset than the longer best of seven. The top seeded team in each of the old leagues, American and National, should benefit from having the best record over the long 162 game season.
The top seed might make its decision based on:
1. pitching match-ups
2. record against the other playoff teams that season
3. geography, both for travel and television reasons.
In the last eleven years there have been these long first round geographic separations:
2008 Boston - LA Angels
2007 Boston - LA Angels
2006 NY Mets - LA Dodgers
2004 Boston - Anaheim Angels
2003 Florida - San Francisco
2002 Anaheim Angels - NY Yankees
2002 San Francisco - Atlanta
2000 NY Yankees - Oakland
Eight of 22 series, 36%.
It would also increase the likelihood of natural rivals playing each other in the playoffs. Maybe the Yankees would choose to play the Red Sox in the first round simply because Boston is near New York. Currently, playoff teams from the same division may not play each other in the first round for reasons I cannot recall.
What this also suggests is that MLB should do what NBA and NFL have done all along: align teams more based on geography. MLB did that for seasons 1969-1993, east/west divisions in each league. But starting in 1994 with the mindless creation of a third division in each "league" and the doubling of the number of playoff teams, the geography got messed up for the playoffs. It doesn't work that well in the regular season either. For instance in the five team AL East, each team plays the others, what, 19 times? (19*4)/162 = 47%. That's fewer than half the games. The divisions have no meaning.
If MLB is clinging to some misguided tradition, it should wake the heck up. Only really old people remember the league structures circa 1960. Most of us cannot, if awakened in the middle of the night, correctly place many, if not most teams, in their proper league much less division. Is Florida in AL or NL. How about Tampa? Seattle? Washington, which had an AL team twice before having an NL team by way of Montreal? How about Milwaukee, which has stolen teams from two different cities (1953 Braves from Philadelphia, 1970 Pilots from Seattle) and switched "leagues" in 1998 (AL to NL). What the heck?