Quote from Ryude
From the wording on how ladder works, it sounds like the problem of Diablo 3 will still be there. The only thing that will reset is Paragon experience, the characters and their items will remain. Basically, the same players will always be at the top of the ladder.
I'm pretty sure it'll be a complete reset. You'll start a level zero and paragon zero. If it's not like that then there's no point in a seasonal ladder.