They arn't using a micro-controller, they are just using a simple 555 and a 4017 decoder driver. You don't really need to use relays in the first design as long as your only driving an LED. However it would be a good idea to put a resistor on the base of each transistor so that you don't completely destroy them from too much current. If you are using a pot for timing then that will be fine, it will allow you to control the speed to your prefferences. I always say this in these kind of posts, but I really hope that you don't have any intention on using this as a legidiment way to control traffic.