Refurb is quite a vague term. I bought a refurb DVD drive that was defective and some circuits were re-soldered. The drive isn't all that great, but I got it for next to nothing.
My refurb printer was used as a demo in the store, so after it had sat on the display shelf for a few months, collecting dust and having every kid push the buttons, they sold the printer for about 1/3 of it's retail price. Let's see, by spending an extra $15 to have it cleaned, and 5 minutes to pop the faceplate off the pannel and free up the stuck buttons... I think that was worth the $400 I saved (it's a combo unit)
Being refurb can mean anything from having cosmetic damage (ie scrached, or a speck of paint, or something) to being almost completely rebuilt. Probably working parts that are salvaged from damaged machines would be considered refurb as well.