I guess we all know what a "new" component is, what a "demo" component is and what a "used" component is. We can quibble on the "box opened just for inspection" representation as somewhat fudging the concept of "new" and feel much better thinking that an unopened box really means it certifies the product within as really, really "new". My question then is : what is actually a "refurbished" product? Is it the same as a "B" product? Is there anything actually done to the unit to qualify it as "refurbished" aside from taking off the fingerprints and packing it neatly in the original shipping materials? Does a component returned by a consumer for some malfunction that is then repaired qualify as "refurbished". Is "refurbished" a cleaned up demo sent back to the manufacturer when a line or specific product in a line is passed over by the buying public or being replaced by a manufacturer to be liquidated by a central agent?. In short, are we, yet again, dealing with fuzzy definitions? Oh BTW what would the range of % discount be on demo units and refurbished units, if one accepts all the problems with generalizations?
In the broadcast & professional video market, a "refurbished" unit is normally a new item of electronic equipment that was returned to the manufacturer because one or more functions failed to work properly. It is then repaired and tested so that all functions work properly. Following the repair and testing, it will be sold by either the manufacturer or a dealer as a "refurbished" or "B stock" unit - often with a full warrantee. As most of these units have some sign of prior use - they cannot be sold as new.
In many cases these "refurbished" units are a very good deal - with prices often 10-20% below what a new, never used unit costs. Given the fact that some companies, such as Sony provide warrantees on their "B" stock units; it's a great way to acquire perfectly functioning equipment at an attractive price.
As above, OR: b) a used product, sent back to manufacturer for full "service" (cleaning, drying, ironing, checking out etc), so any failing parts are replaced, sometimes a component upgrade or two are included -- and the unit is expected to be... functionally, good as new.
Example: my "refurbished" speakers came with two remotes (for the active x/over), drivers had been checked, cables in three different lengths, etc. And they were polished.
I still had to mod them, but that's my story.
Avideo mentions one scenario. There are also B stock units that are new and have never been returned/repaired, etc. This other kind are new models that are either overstocks or discontinued models. All they do is reduce the warranty, which saves them money on possible repairs. They can then cut the price without cutting so much into their profits. Unfortunitely, unless you know an insider, you won't be able to know what kind of B stock they are.
But, beware of "open-box" items. I had an old Philips CD burner/player that I was using to burn only. It was in need of cleaning under the service agreement from Good Guys. They lost my unit in transit and said they would replace it with a newer model. The newer model SUCKED and when I took it in for a refund I saw my old unit (which had subsequently been "found") on the shelf marked "open-box" item. It was nearly two years old at the time. Know this may not relate to higher-end gear but, all the same, be sure to ask many questions and get answers to your satisfaction before buying.
My understanding is that a refurbished unit is one that had a defect, was sent back to the factory to restore it in working order and then returned to the dealer. On the other hand, I always thought B stock was a product that had a blemish or something similar that didn't affect the performance, but couldn't sold on the showroom floor. Or perhaps was damaged in shipping, but works alright. I would be afraid of buying B stock, but not afraid of buying a refurbished unit.
Must an item be furbished before it can be refurbished. Before furbishing is it prefurbished. All items must be open boxed at one time or how could the item get in there? What is "C" stock? Ahh, the mysteries of the world.

Hey Viridian! Good one, you're killin me.
As for B stock items,it's ok to buy them if you know the seller and/or the " reason for B stock", otherwise buy newer used.
Sometimes the manufacturer discovers a flaw after production, and sucks the whole line back to be "refurbished", and then sold through its dealer network to those dealers who want 'em. You can STEAL great NAD T751 and 761 5.1 HT receivers right now, as well L40 one-box
CD receivers. Nice stuff for HT or bedroom/kitchen/gift use.
One additional thing about refurbished could apply to individual units, not to a design flaw in an entire product run as above. The factory might get a failed unit back for refurbishing, but you never know if what the technicians fix is the actual cause or merely a symptom of a still undiagnosed cause. Apt used to have a "three time loser" policy - if the same unit came back from one person for service three times, they would just get a new unit. For these reasons, I would be reluctant to buy anything costly to ship or without a warranty on a refurbed basis. (Most refurbs have a warranty however, at least in the brick and mortar world.)
I buy "B" stock items, but not refurbished. Refurbished products from my experience, almost always have reoccuring problems. I bought a warantee on my cell phone and when it was stollen, they would only give me a refurbished unit. I have went through three refurbished units this month and I will be picking up my fourth on Monday. I have had several bad experiences with home audio and video products also. I just don't feel like wasting my time and not being able to enjoy a product over a few dollars.