(1) You ask someone to give their favourite animal and three reasons why it is (five if you're feeling sadistic) This works best if you ask people how they feel about the animal. It is said to reflect what a person sees as their true nature.
(2) The second favourite animal is meant to reflect how a person thinks others perceive them.
When I first did this test, I said a dog first, because they were clever, loyal, friendly and protective. For the second I said a hedgehog because they were cute, rolled up into a ball to protect themselves and always kept the pricks on the outside (I thought this last bit was very amusing. *rolls eyes* Yes. Well. I was 17 at the time.)
(3) The walk in the forest is meant to reflect a person's attitude to the path through life and how they approach it day-to-day. So a scary forest in which someone gets lost = trepidation about life and so on.
(4) The sea is meant to reflect one's outlook on love.
This test was always a hit at drunken student parties, you know, the 2am point where only the hardcore partygoers (usually your best-friends-in-the-whole-world, with whom you keep in contact with for, oh, approximately FIVE minutes after leaving university) are left. You're all woozy, slightly stoned and definitely drunk and these kind of things acquire a kind of mystical truth.
You end up saying "wow, yeah, man" like it's a nervous tic and smoke so much that you sound like a goose farting in a fog by 4am.
Those sort of parties.
I think they work because people usually choose a friendly sort of animal -- either domestic, or familiar (like a horse) or cute (like a dolphin) first, and then let their imaginations run riot on the second. *g*