Red eye can be very distracting in a photo, but there are a few ways you can correct red eye quickly and simply using photoshop. The most obvious way is using the red eye tool. This is the 7th button down on the side toolbar. (It's also the spot healing brush tool). It gives you options such as changing the pupil size and the darken amount This does the job at 50% of the time. For really bad red eye you might want to try a different route.

The video to the left shows how to eleminate bad red eye by using the lasso tool and changing the color balance. They also use some dodging and blurring techniques to make it look even more realistic.