I recommend looking at Vitalik's post, which is linked to. In a nutshell: the program itself is garbled (hence the term "garbled circuits") in such a way that

I recommend looking at Vitalik's post, which is linked to. In a nutshell: the program itself is garbled (hence the term "garbled circuits") in such a way that it can be evaluated on garbled inputs. Say you have a function f(a, b). One way to encode this is as a lookup table. Now, instead of the table mapping from plain values (bits, in our case) to plain values, we set the inputs to be random labels. The output bit is used with the OTM to get the input label for the next function (logical gate). The security here is that each bit can only be garbled _once_, meaning that Bob can't get the output for a different input. I'm not sure what kind of fake OTM generator you want to set up. Bob can only get half of the data from the hardware, and that data corresponds to a single input evaluation (if at all).