They work kind of like these fans
. By timing the lights so that they turn on at specific intervals that correspond to the position of the fan blades. Couple all that with with the persistence of light that your eyes see, it make them appear like words or other graphics. Check out image #2 on the above link. It shows the effect better.
CRT TVs (the old ones before flat screen LCD or plasma screen TVs) work on the same sort of principle. A scanning beam draws the image very quickly, causing the phosphors on your screen to remain bright long enough to look like a full image. It's so fast that it doesn't appear scanned.
For the tire lights, they're timed with the spinning of the tires, so they only need those 14. Whether someone will actually be moving fast enough on the playa to spell out something--especially this year--is to be determined.