History lesson 101 for all the "kids". (Condensed for length purposes).
Phone systems (especially older phone systems) work on tones. Operators had "more tones" than we (normal phone users) had, allowing them to do, well, more stuff. The first tone that was discovered was 2600hz, which allowed normal users to take over phone systems and act like an operator (What, you thought 2600 magazine was named after the Atari?). The first 2600hz box discovered was mounted in a blue box -- thus, blue boxing, and phreaking (phone + hacking = phreaking) was born.
Skip forward in time. Dozens of boxes were invented, and following the tradition of the blue box, were mounted in different colored boxes. Beige boxes were used for conference calling. Black boxes were very interesting -- they worked off the theory that a ringing phone reported a different voltage than an answered phone. So, by using a black box, you could bump up the voltage on your phone line, making the phone company you never answered your phone. If it was just ringing, you never got charged for the call!
Anyway, a "red box" was a device that played back tones into payphones that made the phone think you had deposited coins into them. On some payphones you can hear the tones -- it's one for a nickel, two for a dime, and five for a quarter. Hold a payphone up to your ear and drop a quarter in and you might hear the five quick beeps (some phones mute the receiver now). A red box can be any device that plays back those tones into the phone, making the phone think you have dropped the money into it.
Quarter Tone
My first red box was a microphone/speaker taken out of one of those Hallmark greeting cards where you can record a message for someone. The mic was replaced with a small headphone jack, and by flipping the switch in one direction you could record -- then I just ran a line from my sound card to the box, recorded the wav file, and then flipped it from record to play mode. Worked great until the batteries died and then I lost it. :/
Anyway, phone systems are much more advanced than they once were. Specifically, digital phone systems have patched many of the holes once open to phreakers. While 5ESS systems were wife open, most places now run 7ESS or newer systems.
If you happen to live in an area with older phone lines (ie: Oklahoma), red boxing may still work for you. In a time where most cell phones have free long distance, it's not as fun or necessary as it once was. Still, it's fun to experiment with and learn about.
http://www.ppchq.org/software - tones
http://www.hackcanada.com/canadian/payphon...ian-redbox.html - more red box information, and how to make the tones.
PS: VirtuaLeech, are you the same person from #oldwarez?