In that case, your homogeneous coordinates have 3 components, and it's pretty easy to visualize them in 3D space. The z=1 plane is your actual 2D plane. Now consider the set of all lines passing through the 3D origin, those are either parallel to z=1 plane or intersect it at precisely one point. That point of intersection is (x0, y0, 1), and if you multiply by any constant factor, the point just moves along its corresponding line.
Thus, any 3d point with z!=0 can be mapped 1:1 to your 2D plane by simply dividing by z. Points where z = 0 don't map to z=1 plane, they're considered "infinitely far away", and can be used to specify directions on your 2D plane (since they don't get affected by translation!).
Once you wrap your head around the 2D case, it's fairly easy to extend it to 3D.
There isn't anything inherently magical about homogeneous coordinates, it's just a convenient notation for referring to points in space that just happens to lend itself particularly well to affine transforms in that space.
For anyone interested, I highly recommend reading this article: http://deltaorange.com/2012/03/08/the-truth-behind-homogenou...