So here is the picture that has appeared on every slide show in every lab meeting we've had this term, showing the formation of the straight-chain backbone before it gets curved into a circle:
Ignoring the little letters (which are just names of enzymes) it really does look a lot like a conveyor belt. At each stage the chain is lengthened, before finally being taken off and twisted around onto itself (to form a circular molecule called DEB). The modular nature of this system is fascinating to work with, but a real problem to sequence. DNA sequencing techniques work mainly by chopping the genome up, sequencing the bits, then trying to stick them back together and modular repeats tend to confuse them.
The last stage, going from DEB to erythromycin, is just a matter of decoration. Although the squashed-rectangle additions (glycosylases, added by glycosylation I believe) look complex, they are quite common molecules that get added onto things in the cell. Glycosylase residues and glycosylation enzymes are very common.
And that's how bacteria make polyketides :)
