Would some kind Day Trading Guru please take some time to...

Would some kind Day Trading Guru please take some time to explain to me what's going on with the DEG Market Depth screen below, just before opening.

OK, so the last close the previous day was $1.215. This morning the top bid on the buyers side is $1.275 (6c more) and the top offer to sell (disregarding the small parcel of 200 shares) is $1.16 (5.5c less than last sale).

Im assuming that the Buyer at $1.275 isn't really expecting to pay that amount and the Seller at $1.16 isn't really expecting to sell at that amount but rather they're offering those prices because it gives them priority in the queue. If that assumption is correct (?) how would the price of the transaction be resolved and what are the risks to consider that a Buyer and Seller might actually find themselves having to buy and sell at those prices. Ive been curious about this for so long I would really appreciate it if someone could explain it to me. Thanks