Clear as mud is right. I must be out of it, as I cannot seem to picture this. I even to the other site given, with pics but with the yarn used, hard to really see what's going on. I might actually have to do it, but if anyone has made a video???
Cast On: Cast on 150 stitches, loosely.
Round 1: Ensuring stitches are not twisted, pick up and knit a stitch below the first cast on stich, along the lower edge of the cast on row. In other words, knit in the thread below the first cast on stitch while leaving the first cast on stitch on its needle. Your cast on row should now be "closed" into a complete circle with your newly picked up stitch on your "working" needle (closest to your body), in front of the other needle which still holds the first cast on stitch. Clear as mud?
Round 1 (cont'd): Continue around in the same fashion, picking up one stitch below each of the original cast on stitches, while leaving those cast on stitches on their needle. Your circular needle will begin to take on the shape it probably had when brand new and still sitting in its package, as it begins to coil up within itself during this round. When you've knitted up one stitch below each stitch of the cast on row, you're finished Round 1.