I find it easier to understand diagrams rather than words.
This PowerPoint presentation is my second attempt to represent Question 1 in diagrammatic form.
The presentation shows the first cycle in the recursion process.
It is provided here so that my fellow students on the Stanford University "Introduction to Databases" course can make suggestions on how to improve the presentation so that it gives a correct representation of Question 1 in the Recursion quiz in particular. I hope that this also gives an insight into SQL recursion in general.
Browser warning: This download works well in Chrome but not in IE9. (at least that is the case on my Win 7 64 bit system)