We have one with flower people/woodland people. Each one fits in a space around the ring, and we remove one and put a candle in that space depending on the birthday number. -So for dd's 5th birthday there were 5 candles. One more candle, one less flower person than last year.
I don't know how other people use their ring, but we use ours first thing in the morning--when it's just our family-for a quiet celebration. We light the candles, the child blows them out, then the birthday child gets a mug of hot chocolate. In bed. Maybe a cupcake too.