The seats towards the front on most flights are "preferred seats" that AC sells for extra money. On some flights, there are also some non-preferred seats blocked off for AC's FFs or those buying higher fares.

At check-in, the latter should be released to the general public, if there are any left. But as of a couple of years ago, you still have to pay for the former (previously they were free, somewhat like the QF system you describe).

It's possible to get a preferred seat for free if you leave check-in until late and all the non-preferred seats have been assigned, but you also put yourself at greater risk of IDB or ending up in a seat you really dislike.

I don't think it matters much on the Q400s though, the seats are all equally crappy. You might be able to move up a couple of rows from row 7, but that's about it. So if you don't feel like paying, I wouldn't worry too much about it.