The names "top down" and "bottom up" refer to the level of a perceptual system operating in perception. Think of the sense organ (eye, ear, etc.) as the bottom (lowest level) of a perceptual system and the association cortex of the brain as the highest level. Top down processing therefore refers to processing based on what is already in the mind or (highest levels of) the brain. Bottom up processing refers to processing based on what is in the stimulus array reaching the sense organ. Of course, both normally operate. It is not an either-or matter.
Perhaps the best example of top down processing is reading text. We often read right over typographical errors in text. Because the preceding text gives us a lot of context information, we know what words to expect and automatically and unconsciously correct the incorrect letter(s) in the stimulus. If you are given something to read, in which every fifth word is replaced by a blank, you can fill in a large fraction of the deleted words (good readers do this much better than poor readers).
This demonstrates that we have expectancies about what words will appear, and these expectancies over-rides the actual stimulus to the eyes when we miss a typographical error. So a good proof reader must work hard to avoid expectancies from preventing bottom up processing: perceiving the letters actually on the page (rather than the expected letters). They do so by avoiding reading for meaning.
The explanation the film gave of the distorted room illusion was a top down explanation. It stated that we assume rooms are rectangular based on our extensive experience. [For some unexplained reason, our extensive experience with people remaining the same size doesn't operate here.]
The bottom up alternative, which in my judgment fits the facts better in this case, states that the room was designed to provide false stimulus information about the shape of the room. The stimulus information told us that the far corners of the room were equally far away, when in fact the left corner was twice as far as the right corner. This means that a person in the far corner makes an image in the viewer's eye that is about 1/2 as big as the image a person in the near corner makes.
Because we perceive size by combining image size with distance, we perceive the person walking from the left corner to the right corner to grow, because her image grows as she actually comes closer to us, but the false depth cues tell us falsely that she remains the same distance away. Because the image size grows, but the perceived distance from us remains constance, the woman is perceived to grow in size (when she is actually coming closer).
To return to the exercise, click on the Back button in the upper left corner of the browser window.