There's actually a proposition here in BC to enact this kind of voting for provincial elections; as far as I could tell, it's exactly as we do it, but they call it the "Single Transferable Vote method" or something like that.
STV is different from what we have and is a form of PR.
Oh, how does it work? Maybe I didn't read the proposition carefully regarding what it does.
EDIT: No, I looked it up and it is the same thing. According to Wikipedia, "When a similar method [of Single Transferable Vote] is applied to single-seat elections it is sometimes called instant-runoff voting." Ours are single-seat elections.