But mostly within families, right? Admittedly I don't have any first hand exposure to these customs, but are red envelopes being given at work parties or between adult friends? The Wikipedia article cited in this thread is a bit vague on this:

"Red envelopes are gifts presented at social and family gatherings such as weddings or holidays such as Chinese New Year. The red color of the envelope symbolizes good luck and is a symbol to ward off evil spirits. It is also gifted when a person is visiting as a gesture of kindness for visiting. The act of requesting red packets is normally called tao hongbao or yao lishi, and in the south of China, dou li shi. Red envelopes are usually given out to the younger generation who are normally still in school or unemployed."

I loved Sacred Economics and I'm all about figuring out how to reintegrate potlatching and other gift economy ideas into the western world. We desperately need mechanisms other than inheritance for transferring wealth to the younger generations. So I'd love to hear that these practices are occurring outside extended families, but that's not been my impression.