There really isn't much to explain.. You have a mirror on the shaft of a small motor, the mirror is at a slight angle so that when the motor turns it, the beam is projected in a circle. It can be done as simply as sticking a small piece of mirror onto a fan and shining your laser on it.
Be sure to use goggles with this project.. when working with mirrors you never know where the beam is going to go.
If you still had trouble understanding the idea, I will draw a quick diagram for you..
Seb
EDIT: Here is a diagram of it. In case 3, the projection on the wall will be a hollow circle, like this: O
In the diagram, the tunnel (btw, it's just Tunnel, not Time Tunnel) is seen as a cone from the side, but if you look at it from the inside it will be hollow, like the cicle on the wall - like a tunnel.
You should really try this out, especially with some smoke in the air to visualise the tunnel well.
Another neat experiment is a spiro. A spiro is basically two or more tunnels combined - you place the mirrors close together so that the first mirror projects the circle onto the second mirror, and if you are using more mirrors, the second projects onto the third, etc. That will create some cool patterns on the wall, and with enough smoke, in the air too!
If you add some speed controllers for the motors, you can change the patterns in all sorts of fascinating ways!
Tip: For a cool swirling effect in the tunnel, mix thick smoke with clean air, rather than making all the air as smoky.
Seb