If you're reading a restaurant menu, and you run across something like "in a red wine reduction," it sounds pretty fancy, doesn't it? Fortunately, reductions are uncomplicated and easy to achieve, because it's a fancy word for something pretty simple.
Water reduces flavour. So by getting rid of the water, you intensify the flavour. How do you get rid of the water? By heating something slowly, and letting the water evaporate. (Hence things like "evaporated milk.") To make a reduction, simply put something in a pan and put it on low heat. The shallower the liquid, the faster the evaporation--so if you put a liquid in a shallow, flat pan, the water will evaporate much faster than putting it in a tall, deep pan, because more surface area = more evaporation. Makes sense, right?
What can be reduced? Just about any liquid -- all those gorgeous pan drippings, beer, wine or liquors, juices, you name it. You can even reduce the last serving of leftover soup and make it into a sauce that way. Let your imagination take you where it will!