How did marbury v. madison illustrate the supreme court's power of judicial review?

It did not establish judicial review. Judicial review had been used in state courts and lower federal courts prior to Marbury, and ruled a number of times that some laws were unconstitutional. In fact, even the Supreme Court used judicial review before Marbury to decide that a carriage tax was constitutional (Hylton v. United States). 

However, Marbury was the first case that the Supreme Court used to rule a law unconstitutional. They declared that a part of the Judiciary Act of 1789 which gave the US Supreme Court court original jurisdiction over writs of mandamus. The Court ruled that Congress does not have the authority to modify the Supreme Court's original jurisdiction, therefore, it was unconstitutional.

In a way, by doing so, the Supreme Court actually took away some of it's power that Congress had granted it because the Constitution did not grant Congress that power.