I bet this is one toy my mom and dad wished I never got. Every time I used it, the house was filled with the unmistakable smell of melting plastic, and in some cases, burnt plastic.
It was a very cool toy, despite the smell. It works very similarly to the processes used in commercial vacuum forming. You heat up a thin sheet of plastic over the built in heater, once it becomes really soft, you flip the plastic frame over the mold you want to duplicate, then pump the lever to create a vacuum that sucks the plastic sheet down onto the mold, where it takes the shape of the mold.
There were times that I left the plastic sheet over the heater way to long and it would droop down and melt (and burn) onto the heater.
Hmm, wonder whatever happened to my Vac-u-Form.