The left hand most picture is what strict phyletic gradualism would predict for a complete fossil record; species evolve continuously, and, if the fossil record were perfect, we would see a nice smooth continuum in morphology in all lineages.
The middle picture is supposed to represent Punctuated Equlibrium. According to that model, speciation events take place quickly (a few tens of thousands of years) in small locations, and so should be largely missing in the fossil record. What we would then see are lots and lots of transitional fossils (the black linettes) with small gaps between them.
The picture on the right represents the creationists incorrect view of the fossil record -- very, very few transitionals with no clear indication of lineages.
"We must respect the other fellow's religion, but only in the same sense and to the extent that we respect his theory that his wife is beautiful and his children smart."
-- H. L. Mencken (quoted on Panda's Thumb)