You have one main match list. On that match list, you can rank advanced programs, categorical programs, or simply prelim programs. For each advanced program ranked, you can assign a secondary list for prelim programs only. Each advanced rank can have it's own prelim list, or you can have a single list, or anything in between.
The one thing you cannot do is "give up" an advanced spot if you don't get the prelim you want. For example, let's say you only interview in two advanced programs, A and B, which are in Boston and San Fran respectively. You also interview at two prelim programs, C and D, also in Boston and San Fran. Let's say that being at a prelim and advanced in the same city is very important to you. You'd want to do the following:
1. A and C
2. B and D
3. A and D
4. B and C
However, you cannot do this. Instead, you do:
1. A with supplemental list C and D
2. B with supplemental list D and C
This tries to match to you A first, and if successful to C. But you cannot "give up" your spot in A if you don't get C and try for a B/D match. If you only list C on your supplemental for A above and don't get it, you'll still match at A and end up in the scramble for a prelim.