This is some species of christmas tree worm, Spirobranchus sp., found in a coral head in Australia. These worms have a hard calcareous tube, which they can retract into to escape from predators. They can see light and dark, and may retract if a shadow passes over them. The two christmas tree-like plumes are made up of ciliated tentacles which they use to filter out plankton. The cilia sort them by size and the worms only ingest plankton of the correct size. The larvae of these worms preferentially settles on certain species of coral. There are different coral preferences for different Spirobranchus species. A really good online article on them can be found here.