For example. You buy a brand new laptop computer. The usb ports don't work. You call up the company, tell them the ports don't work, and then you send them back the laptop. They send you a brand new one. They take the broken one, replace the USB ports, and then sell it as "refurbished." Refurbished basically means that one or more components of a brand new item did not work, so the original manufacturer replaced the faulty parts.
I recently purchased a refurbished Nikon D50 kit from Buydig. Besides the non-standard packaging, the camera and lens both appeared to be brand new. Not a scratch, smudge, fingerprint.....nothing. The camera came in a Nikon "refurbished product" box. The lens came in a plain brown box with refurbished stickers. Both were packaged well and came with all associated paperwork and accessories. Everything I received was looked brand new, never used. I would not have any hesitation ordering another refurbished product from Nikon.
I bought a Minolta camera two years ago as a refurb. It looked great when I got it. After about 10 minutes of use, it stopped functioning properly. So I sent it back in. Again, it worked at first but that only lasted a few minutes. A lot of money to UPS and a 15% fine for returning the it and I was back at square one.
My dad decided to get a refurbished phone set to replace our old unit. Not only did it come without parts (which the description failed to inform us) and then after a month or two one of the two handsets stopped working. Go figure.
I've heard many good things about refurbished electronics, but I'm never going there again.