How is sea level determined?

Sea level is determined by the magic of time averaging.  If I recall correctly this is done by math.  GPS receivers and transmitters are distributed over the oceans based on surface area.  The Pacific Ocean gets 162, one for each million square kilometers, the Atlantic Ocean gets 82, Indian - 73, Southern - 20, and the Arctic - 14.  It is important to note that using the numbers based on the square kilometers, not square miles will yield the metric sea level. 

Originally the GPS devices were attached to plastic floaty things.  But these are not biodegradable, and many people complained.  As a result now days scientists have moved to biodegradable materials, namely the skinned carcases of clubbed baby seals.  Visit this link for a shirt to protest clubbing baby seals.  All the results from the seals are compiled and averaged, giving an accurate measure of sea level. 

NOTE:  The sea level seems to be rising, there are several theories.  First, it is melting ice caps due to global warming.  Second, thermal expansion of water, again due to global warming.  Third, it is all in your head caused by delusion brought on by, you guessed it, global warming.

It is also important to note that "sea" level is actually "ocean" level.  Sea's vary in their height.  For example, the Mediteranian Sea is at sea level.  The Dead Sea is 418 meters below sea level. The Caspian Sea is 28 meters below sea level.  The Aral Sea is about 170 meters above sea level.  The Sea of Tranquility is on the moon, about 385,000 kilometers above the earth, although this sea has no water, and therefore can be neglected for most calculations.