It's simple and complicated. We all do it in every aspect of our lives regardless of if we are aware of it or not. How effective we are at it is something entirely different. The most important part is the observation phase, if you aren't attending to the right stimuli, or are being decieved either by yourself, or your enemy then the rest of the cycle will not be very effective.
The mismatch between reality and what you think is reality will compel you to go through the cycle again until you achieve the desired outcome or until the enemy achieves his.
If you get a chance to read Boyd's Destruction and Creation it really helps to explain more of the theory. Really opens it up more.
usaf2ltb's suggesstion of
www.d-n-i.net is right on. Great sight not just for Boyd enthusiasts but for the Military Reform, 3G and 4G warfare, and goings on in the Pentagon as well.
Great Books on Boyd are:
Mind of War by Grant T Hammond:
Great info on Boyd's life, the Military Reform Movement, and Boyd's other theories on War as expressed in his Patterns of Conflict brief.
Boyd by Robert Coram
Boyd's biography. The great part about this is Destruction and Creation is included at the end of the book. IMHO one of the most brilliant things I've ever read.
Also a paper on Boyd's theory as it applies to the Army:
A Critique of The Boyd Theory - Is It Relevant to the Army
Authors: Polk, Robert B.; ARMY COMMAND AND GENERAL STAFF COLL FORT LEAVENWORTH KS SCHOOL OF ADVANCED MILITARY STUDIES (Haven't read this one yet, but it's on the list.)
Sorry for being long winded but this topic is great.