Round Robin Arbiter

Hello there guys!

Could someone please give me an explanation for the following code I 
have found of a Round robin Arbiter?

http://www.asic-world.com/examples/vhdl/arbiter.html This is the code!

I cannot understand what is the use of the internal registers and what 
do their names mean!In addition I cannot quite understand the structure 
of the architecture with the "not" and in addition with the masks later 
on!

Please give me an explanation.

With regards

nick