Didn't read all the replies, so someone may have already mentioned this...
The correct way of fixing the problem is changing the source of the program that's using /dev/random to use /dev/urandom, instead.
It's a well-known "issue" that /dev/random is blocking and doesn't usually have much data for you to get from it. Most of the time you shouldn't need so much truly random data.. but if you do, it's probably safer to feed it from other random sources: noise from sound card input, radio receivers (wifi/bt/gps), temperature fluctuations, etc.
That is a good solution for app developers, not for users. This is a good solution for users because for every app that does use /random instead of /urandom now has data to "feed" off. A better solution for users would be something akin to permissions fixer that actually goes through every app and finds/changes that command line to point to /urandom but of course I don't know that such a script could be devised. For now this is a good solution until a better one is found, but, for older devices especially, this is an awesome tweak that seems to be making a lot of people happy.
Why it works exactly technically speaking is actually of secondary importance and it would be better if we tried to help OP figure it out than to blindly opine on the matter, but the fact of the matter is that the seeder IS improving some performance on devices and it does not appear to just be OCing, OVing, or just scaling a governor or an IO scheduler, so it is certainly worth looking into.
Inferring that the OP is less than honest or nefarious or just acting condescendingly toward him or this tweak is puerile and in my view goes against the atmosphere this forum tries to convey, which is to actually help real development and figure out why things operate as they do. He's made some kind of breakthrough, now let's enjoy it and dissect it instead of just stating why it theoretically shouldn't be improving performance. It may be under the hood, it may be below the Dalvik VM level, or whatever the actual cause may be.