the reason to just look at [0,1] is that if it is dense there, then, it is dense in [n,n+1] (by translation) and you know that the set Z+\sqrt{2}Z is dense in R.
As for n\sqrt{2} mod(1), let's clarify what it means:
\sqrt{2} mod(1)=0.4142...=\sqrt{2}-1
2\sqrt{2} mod(1)=0.8284...=\sqrt{2}-2
3\sqrt{2} mod(1)=0.2426...=\sqrt{2}-4
So, it is just eliminating the integer part so that the number fall between 0 and 1.
This is what I mean by "circle", it is like you have a circle with circumference 1, you start at point 0, go clockwise for\sqrt{2} unit, you will pass the point 0 and reach 0.4142..., and go clockwise for another \sqrt{2}, you will get to 0.8284...
Now, if \sqrt{2}Z (mod 1) is not dense in [0,1], then there are a<b, where a=m\sqrt{2} (mod 1) and b=n\sqrt{2} (mod 1) such that nothing between a and b is a multiple of \sqrt{2} (mod 1). Note that \mu=b-a>0 is irrational.
The set S={c|a<c<b} is a "forbidden region" (meaning that S is free of multiple of \sqrt{2} (mod 1). Then, for any integer k, k\sqrt{2}+S (mod 1) is also forbidden. Pick any integer M>1/\mu, the total length of the M+1 sets S, \sqrt{2}+S,..., M\sqrt{2}+S exceed 1, so, at least two of them, say S_{p}=p\sqrt{2}+S and S_{q}=q\sqrt{2}+S must intersect. If S_{p}!=S_{q}, then a boundary point is inside a forbidden region, wlog, say upper boundary of S_{p} is inside S_{q}, then, since that boundary point is just b+p\sqrt{2} (mod 1), which should not be in any forbidden region, we are left with S_{p}=S_{q}. But this is impossible, since \sqrt{2} is irrational. So, we have a contradiction.