The Red Playroom is one of Castle Heterodyne's medical labs—facilities for putting together and taking apart people. Apparently these are scattered liberally throughout the castle, in case the ruling Heterodyne decided to do some spontaneous experimentation, and didn't want to drag the subject very far.
This particular medical lab was the favorite of Iago Heterodyne, who apparently loved the screaming of his experimental subjects so much that he installed an artificial scream generator for those occasions when the actual thing wasn't available.
Agatha and her party hoping to find supplies and equipment to stabilize the seriously wounded Tarvek. Moloch is not so keen on the Scream Emulator. They initially consider using the Human to Pet Brain Transplant Device as part of the procedure they plan for Tarvek. They also discover Iago Heterodyne's Toaster. The Artful Blood Drainer is reworked to help in Tarvek's treatment. Pointed out amid the various devices is also the Amusing Octo Electrocuter.