Hmmm...I still question it. Seems like you might just end up with a huge mound of dirt with oil seeking through it.
The theory is that the oil is within pores in the rock within the reservoir. It's under pressure, so if there is a hole up to the ocean floor, it will spray out.
At the moment they're pumping mud into the pipe - it's a lot thicker than the oil, so should leak out of the holes more slowly. The idea is to pump faster than it leaks out, forcing the mud down the hole. The idea is to keep pumping it in faster than it leaks out, until the whole well is full of mud.
The mud is extremely dense - so dense, that when the well is full of mud, the pressure at the bottom of the column of mud will exceed the pressure in the rock, and no more oil should be able to flow out.
There will be a lot of mixing with oil - so they need to keep pumping the mud in for a long time, and constantly adjusting the pressure so that the oil already in the well hole, can float to the top and escape, allowing the denser mud to pool at the bottom of the hole, where it can apply pressure.
However, as it progresses it should get easier as once the mud starts to go down the hole, it'll start exerting more pressure on the oil underneath, slowing down its escape from the rock below.
The risk with this, is that there are fractures in the steel lining of the well, and that the mud (which will be at much higher pressure than oil) just pours out into the surrounding seabed/rock and gets lost. Other concerns are that the higher pressure might crack the well lining, or cause further damage to the BOP and leaking pipes. That's one of the reasons why they didn't do it earlier - it's a relatively risky procedure.