A phreak is someone who breaks into the telephone network illegally, typically to make free long-distance phone calls or to tap phone lines. The term is now sometimes used to include anyone who breaks or tries to break the security of any network. Recently, the phone companies have introduced new security safeguards, making phreaking more difficult.
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According to Eric Raymond's The New Hacker's Dictionary, phreaking was originally a more innocent occupation and hackers would sometimes take up the challenge. The typical phreak was or is usually equipped with a specially-made "box" designed to "fool" the network in some way. Different boxes, somehow named for different colors but not necessarily painted any color, are used for different phreak approaches. A "black box" allows you to make free calls from a home phone; a red box" to make free calls on a pay phone; and the infamous "blue box" provides complete control over the telephone system. If you look hard enough on the Web, you'll probably find directions on how to make all of these boxes. (But note that using the boxes as directed is probably illegal and any directions you find may be out-of-date.)