For example writing red is more efficient than #cc0000. It has less characters, takes up less space, and is easier to remember.
Are there any down sides to using color names over hex codes or RGB values? This includes programming in a multi-developer environment.
Different browsers may not agree on what some color names mean. There are not names for all 16 million 24-bit colors. In fact there are only 17 W3C-standard color names. It’s probably OK to use those.
Personally I use a templating system at build time to pre-process my CSS files, so that I can keep a standard set of site colors and refer to them by name. That way I get the best of both worlds: I know exactly what my RGB color values are, but I can use simpler names in the CSS.
(Of course, it’s still not possible to know exactly how a color will look on a given user’s browser.)
edit — in the 5 years since this answer was written, preprocessors like Less and Sass have become pretty common. Those provide some very sophisticated tools for managing colors (and many other things) in CSS sources.
edit more — ok in the 8 years since then, the color names have become standardized. The answer from "Liyali" is much more up-to-date.