Be there no later than 8 a.m. but a bit earlier is probably better. You wait on line until the box office opens at ten, and you buy your tickets - you stand in the back of the orchestra, and it's $21.25.
I just got back from NYC and saw Spamalot SRO. My advice would be to go on a Wed. or Sat. - double the chance of getting tickets. There are 28 for each show - each person can buy 2 each. We got in line at 6:30 a.m. and were fourth in line. Anyone who got there after 8:30 a.m. did not get tickets on the day we were waiting - even with the two shows.
With that said ... though the show was good and well worth the $21.25 price, the standing room "seats" offer a slightly restricted view of the stage - the top 25% or so was cut-off by the mezzanine hangover. If you can get your hands on partial view seats (far left and right of rear mezzanine) - it's the way to go. Only $47.00 (or maybe less) and you get to sit down. Your view isn't that limited - I checked them out myself at intermission and promptly kicked my own ass for not grabbing them when I had the chance a few weeks back.