Rick Slusher, a graphic-designer based in New York, wins with a super elegant summary of the film contest conduct by www.fastcodesign.com.
Rick's entry shows each character as a coloured line; the layers of dreams are depicted as concentric circles. Characters enter each dream level to the left. When they all start inhabiting one of the character's dreams, that character's color-coded line expands accordingly (to show that everyone is running around in his dream). As characters fall out of each dream sequence, they exit on the right of the chart. The concentric rings depict how time slows down in each layer of dream: