What is the role of traveling waves in circuit formation during cortical development?
Traveling waves are a developmental mechanism to "prime" neural circuits. In a mature adult, certain mechanisms allow the strengthening and weakening of synapses (LTP/LTP, dendritic spine growth, etc...). These same mechanisms are used during development to achieve initial connectivity. For these to work however, spiking activity must be present. Experience will later produce complex and meaningful patterns of activity between structures, that will in turn produce complex and meaningful patterns of connectivity. Until that point, the neural structures must be synaptically linked so that learning can begin after birth.

Certain cellular mechanisms guide axon growth, and this transient bursting activity "captures" the specificity of these growths as synapses. When this bursting activity is disrupted, the precise topographical connections are lost. 

References

http://www.sciencedirect.com/science/article/pii/0896627393901228
http://www.annualreviews.org/doi/abs/10.1146/annurev.neuro.28.061604.135714?journalCode=neuro