The radial engine is a reciprocating type internal combustion engine configuration in which the cylinders "radiate" outward from a central crankcase like the spokes of a wheel. The radial configuration was commonly used for aircraft engines at turn of previous century.
If you want to know how the radial engines work, have a look at this video:
Radial engines have been used not only in aeroplaces but also in tanks, combat cars, self propelled howitzers so it was quite natural progression that someone would come up with an idea of using these engines in Motorcycles.
The Megola was a German motorcycle produced between 1921 and 1925. a rotary engine mounted within the front wheel. The engine contained five cylinders with side-mounted valves, each of which displaced 128 cubic centimetres with a bore/stroke of 52 by 60 millimetres providing total displacement of 640 cc. The cylinders rotated around the front axle at six times the wheel speed; thus while the cylinders were at maximum of 3600 rpm the front wheel was turning at 600 rpm, or roughly 60 miles per hour (97 km/h)
Here is a short video: