Red5 is open source licensed under the Library (or Lesser) GNU Public License (LGPL). Here are the main features of the LGPL with respect to its use by commercial products:

A commercial product can use Red5 (as a library) without having to become open source under the LGPL. (This is the big difference to the GPL, where applications using it must be licensed under the GPL as well.) So, if you for example use Red5 to write a product for streaming and or data transfer, you can sell this product without any restrictions (ship it with Red5 included) and you do not have to make your application open source.
If an application makes modifications to Red5 itself, the modifications (not the application !) have to be sourced back into Red5. Typically, how this works is that you will contact the Red5 project with the modifications for Red5, and we then decide whether to incorporate them into Red5, or not.

I give credit to JGroups for helping me explain the license (http://www.jgroups.org/javagroupsnew/docs/license.html)

Additionally, I will add a second definition provided by Art Clarke on the mailing list:

"I only wanted to clarify for others who may not know, that it's not required to "contribute back" experimental code that is never distributed (nor is contributing such code required under the GPL), and in addition, your apps that you build on top of the Red5 core are not required to be "contributed back" either (the key difference between LGPL and GPL) when you actually do distribute them.

You ARE REQUIRED to contribute back any changes you make to the Red5 core code that your Red5 app depends upon AND that you distribute to any third party.

As a simple rule of thumb (but probably not complete), if you're making Java changes in the "src" directory under the Red5 tree to get your own app working, you will probably be REQUIRED to distribute those when you launch your actual app.  If your changes are solely in your own source tree, without any Red5 code (i.e. you're just linking to the Jar), you may not have to contribute them, but feel free to anyway."