In electronics, modulation is the process of varying one or more properties of a high frequency periodic waveform, called the carrier signal, with respect to a modulating signal. In this circuit, the modulating signal is standard composite video signal from a source like VCR which is fed to J2 jack, and the carrier signal is VHF radio frequency generated in the circuit by higher harmonics of the crystal oscillator X1. The output signal can be received from jack J1 on the VHF band ( about 189 MHz ).
The potentiomete P1 and P2 control the light and the contrast of video signal respectively.
Note: The circuit does NOT modulate the audio signal of the pictures!