The BEC is held in a focused laser beam acting as a dipole trap (this is a useful search term if you want to look for more information on the scheme). Atoms in the beam feel a space-dependent potential which is proportional to the laser beam's intensity. If the laser is blue-detuned this potential will be repulsive, but for the set-up described in the Steinhauer experiment the laser is red-detuned (in the figure this is the red laser with a wavelength of 812 nm), and so the atoms are attracted towards the higher intensity part of the beam. The lowest mode of a laser has a Gaussian intensity profile, and so the atoms are attracted toward the center of the beam. A good approximation is that they experience a harmonic confinement, in the plane perpendicular to the direction of propagation of the beam. This potential is normally quite shallow, and so it is important that the atoms are sufficiently cold before being placed in the dipole trap, otherwise they will simply escape. The depth of this potential is measured by the "transverse trapping frequency", which in this case was about 130 Hz.
In the experiment described, the BEC is held at rest and and a step potential, formed by shining a blue-detuned laser (the blue laser with a wavelength of 442 nm) onto the condensate, is moved along it at a constant speed. In the figure, the blue laser is moving from right to left at $v_{\mathrm out}$. So in the rest frame of the step, the step is stationary and the BEC appears to be flowing over it. In this frame of reference the condensate downstream of the step (or "waterfall") is accelerated to supersonic speeds, which produces the black hole analog.
