Nodes at the lowest level are arranged directly in a circle around their parent. At the upper level, the already arranged nodes form branches that are arranged in a circle around the new parent node. The algorithm is recursively repeated till the highest level is reached. If nodes in the tree have uniform number of children, the end result has fractal-like appearance (subsets of the graph look like scaled-down copies of the whole graph).
You can choose which node should be displayed at the center of the topmost circle by setting the Root property. If it is not specified, the algorithm automatically selects a root that leads to more balanced distribution of nodes.