Even being part of the Red5 development team, I always found adding or changing libraries a pain. To alleviate this I created a Bootstrap class. Its purpose is to look in the red5/lib directory and grab urls for all the jars contained therein and add them to a classpath. I have also added logic to keep only the most recent versions of libraries, although this logic could use some work and is not perfect. The code will miss libraries with slight name changes such as: jcl104-over-slf4j-1.5.0.jar vs. jcl-over-slf4j-1.5.2.jar.
Red5 previously had two ways to start up: standalone and war. The standalone method uses the classpath embedded in the /META-INF/manifest.mf located in the red5.jar; if your library was not listed here your application would not work, unless you placed it within your applications classpath. Your application classpath would consist of any class residing in your /WEB-INF/classes directory or in a jar located in your /WEB-INF/lib directory.
The bootstrap method of start up should also allow you to share libraries amongst your applications, I have found problems with some libraries like Hibernate but most issues seem to be resolved by updating Spring to 2.5. If you have problems you can always move the jar to your applications lib directory. So without further ado, here is how you launch Red5 using the bootstrap class:
java -Djava.security.manager -Djava.security.policy=conf/red5.policy -cp red5.jar org.red5.server.Bootstrap
Note: The Bootstrap class is only available in version 0.7.1 and later