How do services like Merriam-Webster or Dictionary.com select the word
of the day?  We are interested in understanding the amount of human
and/or computer involvement in the selection process.

Ask Oxford FAQS seem to imply that there is a human selection involved
as they state that "Most users want the words chosen for the Word of
the Day to be the more unusual and interesting words." Therefore it
seems to me there must be a final selction by a human. Also I seem to
recall that often they have words on Word of the Day which are in
current fashion or in the UK news.
http://www.askoxford.com/contactus/wotd/faq/?view=uk

answerfinder-ga

my dad used to work part time for merriam-webster and he said there
all randam all the words are in there data base and then it is
selected by the couputor.  he said that sometimes but very raley it
would be by hand, the only time he could remember is when they
couldent axcess there computer so someone just picked one.  Also after
there picked they go into a used data base so that they wont be picke
agian unil needed.
        i hope that helps