According to an interview with the New Jersey director of the office of counter-terrorism in the the South Jersey Courier Post Online, a red alert means that “all non-critical functions cease.”

Red alert? Stay home, await word
Sunday, March 16, 2003
By TOM BALDWIN
Gannett State Bureau
TRENTON
If the nation escalates to “red alert,” which is the highest in the color-coded readiness against terror, you will be assumed by authorities to be the enemy if you so much as venture outside your home, the state’s anti-terror czar says.
“This state is on top of it,” said Sid Caspersen, New Jersey’s director of the office of counter-terrorism.
Caspersen, a former FBI agent, was briefing reporters, alongside Gov. James E. McGreevey, on Thursday, when for the first time he disclosed the realities of how a red alert would shut the state down.
A red alert would also tear away virtually all personal freedoms to move about and associate.
“Red means all noncritical functions cease,” Caspersen said. “Noncritical would be almost all businesses, except health-related.”
A red alert means there is a severe risk of terrorist attack, according to federal guidelines from the Department of Homeland Security.
“The state will restrict transportation and access to critical locations,” says the state’s new brochure on dealing with terrorism.
“You must adhere to the restrictions announced by authorities and prepare to evacuate, if instructed. Stay alert for emergency messages.”
Caspersen went further than the brochure. “The government agencies would run at a very low threshold,” he said.
“The state police and the emergency management people would take control over the highways.
“You literally are staying home, is what happens, unless you are required to be out. No different than if you had a state of emergency with a snowstorm.”

Here’s text on what a red alert is from the Homeland Security website:

5. Severe Condition (Red). A Severe Condition reflects a severe risk of terrorist attacks. Under most circumstances, the Protective Measures for a Severe Condition are not intended to be sustained for substantial periods of time. In addition to the Protective Measures in the previous Threat Conditions, Federal departments and agencies also should consider the following general measures in addition to the agency-specific Protective Measures that they will develop and implement:
1. Increasing or redirecting personnel to address critical emergency needs;
2. Assigning emergency response personnel and pre-positioning and mobilizing specially trained teams or resources;
3. Monitoring, redirecting, or constraining transportation systems; and
4. Closing public and government facilities.