X10 is a type of home automation device which the guys use to hook up their lamp, stereo, and remote controlled cars to the Internet. They enable 'public access' which allows these devices to be operated by other computer users around the world. Penny is not as impressed as Leonard would like. She asks why they would do this, to which they respond, "Because we can!"
Sheldon described the endeavour this way: "You know, in the future, when we're disembodied brains in jars, we're going to look back on this as eight hours well wasted."