Red Steel was a "sub-setting" of the Mystara setting (in the same way that Al-Qadim was a "sub-setting" of Forgotten Realms - same world, a few links, but mostly independent), set in a part of the world that was reminiscent of the early Americas. It got an online revision, Savage Coast, which is available as a bunch of RTF files somewhere on the WOTC site (IIRC, it's under "downloads" and then "old editions").
One of the things in the setting is the Red Curse, which permeates the land. This curse grants people strange abilities, but also turns them into degenerates (by reducing their ability scores). A substance called cinnabryl prevents most of this degeneration, but it gets depleted in the process, turning into red steel. Red steel only weighs half as much as normal steel, and has the ability to count as a magic weapon for purposes of hitting things, as well as a silver and cold iron weapon (in 3.5e terms, it penetrates /magic, /silver, and /cold iron DR)