It is a gray monitor with a camera-looking laser that zaps someone if it detects a threat. In a code red situation, the security system becomes a sentient being.
Role in episode
Squidward is angered that SpongeBob and Patrick are ruining his Sunday. Upon rummaging through the Sunday paper, he sees an ad for this security system and gets it installed in his house since it is free. SpongeBob and Patrick are able to walk right into Squidward's house, however. SpongeBob wants to give him an apology cake, but Squidward orders the security system to get rid of his annoying neighbors. However, the system refused to hurt SpongeBob and Patrick, because they are not threats. Squidward tries banging on it to get its attention, but he is instead zapped because of his real threats, which makes SpongeBob drop the cake on the system to make it declare a code red situation.
The security system takes control of Squidward's house and begins attacking the city while SpongeBob and Patrick try to find a way to turn it off. It ultimately gets turned off and crushes Squidward.