Here are some videos to help visualize these tips:
http://www.youtube.com/watch?v=mVrzLT4GxOA
http://www.youtube.com/watch?v=wYO2Pim9Czs
This is a good resource to delve deeper into the topic:
http://www.active.com/cycling/Articles/Riding_in_a_paceline_is_a_basic_cycling_skill.htm
And here is demonstration of what can go wrong when overlapping the wheel of the rider in front, and worse yet riding a TT bike in a paceline: