Summary

It's just a astable multivibrator, it's all very well explained here http://rayshobby.net/blog/?p=1079
Tricks are:

• Make it small (it will be on the bicycle wheel)
• Make it attachable to your bicycle wheel so make holes and make it thin! Use small CR2032 battery.
  • How long will it run ? measured 2.5 mA of usage, means ... http://oregonembedded.com/batterycalc.htm
• Calculate the bling bling speed:
  • Formula is explained in Wikipedia also http://en.wikipedia.org/wiki/Multivibrator
  • Use the specific case with R2=R3 & C1=C2 that gives you the same duration for the 2 leds to blink (when one is on the other is off and reciprocity with same periodicity)
• The trick : how to put it on the wheel, leave it here and not put a on/off button
  • ... use a tilt switch! A small enclosure with 2 pins inside and a metal ball. Turn it outward, the centrifugal force will make the contact when the wheel turns, but when stopped just have your wheel with the correct "side" up and it will be off.

(Wikipedia image)

I won't explain the schema here, first I don't grasp the subtilities and it's very well explained in the links above.
Just in case, a few hints :

• R1 and R4 are current limiter for the leds : in my case between the NPN emitter and ground. They have no role in the frequency except that the ratio R2/R1 should be < hFE (read somewhere) to have no transition.
• The formula is (with C1=C2 and R2=R3) : F = 1/T = 1 / (ln(2) * 2 * R * C)
  • In my case : F = 1 / (ln(2) * 2 * 10000 ohm * 4.7 uF) ~= 15 Hz

Pictures