You start out on an honours degree then if you narrowly fail a year (I believe usually 35-39%, i.e. just below a third) then you can be allowed to proceed to the next year but on a pass degree. Graduating with a degree without honours means you don't get a grade (like a first, 2.1, etc.) and your degree is basically a bit lower than someone who got a third with honours. Instead of taking 120 CATS, you then take usually around 90 CATS (though can be up to 120 with special permission, and can sometimes be a bit lower I believe) per year.
The Seymour formula essentially goes along these lines:
Final percentage = Actual percentage x ((120 + Actual CATS)/2) / 120
So, if you take a normal load of 120 CATS, your final grade is the same as your actual grade (so if your percentage worked out as 70% overall, that's what you get). If you did 135 CATS instead, your actual grade would be scaled as:
Final percentage = Actual percentage x ((120+135)/2) / 120 = Actual percentage x 127.5/120 = Actual percentage x 1.0625
In this case, if your percentage was 70% overall, the Seymour scale would "boost" you to about 74%.
There's probably a clearer explanation of it on the Warwick website - search for "Seymour formula" and you might get a better answer!
Having personally overcatted each year, I would say it can be perfectly doable depending on your modules, how much you enjoy each, how much time you're willing and able to spend on them, etc. I did it because I was genuinely interested in each module I chose to take - it's nice that it brings your score up a bit but bear in mind that there is extra work involved so it's not really getting something for nothing!