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In answer to your first question -- just go all out. The only way to be a bad winner is to taunt the loser, do a flashy victory dance with lots of implied insults, or otherwise act like an unsportsmanlike a-hole. The victor owes personal courtesy to the loser, and nothing more -- certainly not a handicap to make them feel better. As someone else said, that can actually be destructive.
In answer to your second question -- that's cheating, more or less. You're giving somebody an advantage they shouldn't have by _not_ playing all out. I imagine that this seeding process can be political and subjective, but what kind of playing environment do you have if the second rank of players consists of the first rank's friends, and are _only_ at that level by the friends' connivance. And a third rank of players who are possibly _better_ than the second rank, but don't have the right friends. What would you say about a sport played like that?
It doesn't matter what other people do. Play the game, not the politics. Or the game means nothing.
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