It is a long train which operates quite quickly and in circles. It does not contain seatbelts and the front looks like SpongeBob and the rest is yellow, with SpongeBob's faces on them.
Role in the episode
The train is designed for the Krusty Sponge and is used as part of Mr. Krabs' marketing scheme to put SpongeBob's face on everything to sell money. Mr. Krabs charges $1.98 for tickets and warns everybody that seatbelts aren't included.
Later in the episode, after Mr. Krabs is sent to court and pleads guilty, he makes a deal with the judge to drive him around the Krusty Sponge Fun Train after realizing the judge, Horace A. Whopper, has a SpongeBob gavel. However, instead it is Squidward who is forced to drive Horace around the train, much to the former's annoyance.