The main idea of Iron man rule is that each time card is placed on graveyard, that card is ripped in pieces. So if you play an spell that card is removed from your deck for good, you will not have that card in your next game and you need to replace it with something else from your draft/sealed pool, and when nothing else remains just add more basic lands.
The way you draft cards and how many cards each player has can change depending on the organisers of the game. I think the most common would be to play with a pile, draft or sealed.
I think in theory it would be possible to take this rule and just remove the cards from game if you are playing with a cube or you are thinking to give the cards that would be destroyed to someone else but it does not have the feel to it.
MTG blog 