shuffle on iPhone

What exactly happens when one presses "shuffle" while listening to music on iPhones? Is it some mystical mathematical formula or a real shuffle. Does the formula begin with the 1st song on the list or the current song? If I shuffle at the top every time I open iTunes, will I get the same shuffle? I seem to be hearing a LOT of the same songs when I shuffle and quite a few I never seem to hear. Is there another setting I've missed that opens up the list? Thanks in advance for any insight.