The red wire powers all the engine actuators (injectors, fuel pump relay, TAB & TAD solenoids for the smog pump, the Electronic Vacuum Regulator for the EGR system, Purge valve for the carbon canister and the IAC for the idle.
The computer provides the switched ground for each injector, actuator and relay. An automotive circuit must always have a power source and a ground. No ground, and you can have all the electrical power the car has on the supply wire and nothing happens. The ground is the return path for the electricity to get back the battery and alternator.
On all computer controlled circuits, the computer does not source power to any actuator, relay or solenoid. Instead it provides a switched ground to complete the circuit. When the computer switches the return wire for the load (relay, injector, or solenoid) to ground, the load operates and does the job it is supposed to do. This increases the reliability of the computer since it does not supply power, only ground. If a power wire shorts to ground, it makes smoke, sparks and often burns something up. If a switched ground shorts to ground, no smoke, no sparks, no computer damage occur. Whatever the load was, be it relay, injector, or solenoid, it just doesn't stop or quit running when it is supposed to stop or quit running.
When the computer switches a ground on, the voltage drops from 12 volts to less than 2 volts. On everything but the fuel injectors, dumping the codes causes the actuators to toggle and change states briefly. It's a quick and simple way to check the operation of the solenoids, actuators and relays.