With digital cameras becoming more and more common, it's getting easier and easier to get images into the computer for retouching.
Red eye occurs when light reflects off of the capillaries in the back of the eye.
Typically this happens when the flash is directly above the lens and the subject is looking into the camera. In this first example, the pupils are dilated far enough to reflect from an angle. Let's zoom in and apply two different techniques. It looks as unnatural as the red eye.