The red room began as an interactive flash animation that you can watch here. It's in Japanese, but you get the gist of it. More importantly, turn the sound on for the full effect. The voice is creepy as hell. You'll know when you hear it.
Two boys are discussing the rumour of a pop up that asks "Do you like-?" The rumour goes that if you close it, you'll die. One of the boys is skeptical about it, and searches all over the internet to find out more about it, but can't find any information about it. When he gives up, the message pops up. A girls voice says "Do you like-?" and the boy closes the ad. It appears again. He closes it. This happens until he notices that the question changes to "Do you like red?" Again, he keeps closing it until the question is complete. "Do you like the red room?" A website with a list of names then appears, his friend's name at the bottom. He feels the presence of someone behind him. The next day, everyone's gossiping about two students that committed suicide and painted the walls in their blood. The name of the skeptical boy was added to the list of names on the computer.
Apparently, when that finishes on the site, the pop up comes up if you haven't disabled them... which is why I didn't watch it fully. It's not the actual thing, of course, but I get scared pretty easily sometimes.
This would just be a creepy story in most situations, but it's infamous for a good reason. The Sasebo Slashing was the murder of a 12 year old girl at school by one of her classmates. The culprit had the video bookmarked on her computer.
