I would just like to understand why in the cycles fake absorption setup he ray length have to be multiplied against the backfacing value in order to tell Cycles when the ray starts and stops. I did the BlenderDiplom tutorial and there was no explanation as to why that does what it does. I can use the fake absorption setup with no problem, I would just like to understand exactly how it works so I can use it knowing exactly what it is doing.
The way the node setup you are referencing works is by coloring the inside wall of a material based on how far the ray has traveled within the material.
The backfacing output gives
1 if the ray is hitting the side opposite the normal (the "front" of the face), and
0 if the ray is hitting the side with the normal (the "front" of the face). So the output of the first multiply node (from the left) will be
ray_length * 1 = ray_length if the ray is hitting the backside of a face (meaning it is inside the object) and
ray_length * 0 = 0 when the ray is hitting the front of a face (meaning it is outside of the object).
The rest of the nodes just convert the linear falloff to exponential and use that result to mix the base color with the absorption color.