In the case of a residual haunt, the popular theory is that there is actually no haunting at all; there are no ghosts or spirits as they are traditionally thought of. The paranormal activity in question is the result of energy being imprinted on a substance capable of storing it such as limestone, sandstone, quartz, a static body of water, or even wood. Then when conditions are right, the energy is "played back", much like a tape recorder would do. This energy can account for voices or other noise, smells, apparitions, and possibly even objects being moved.
The process by which this "recording and playback" happens is not well understood, but is generally thought to happen during times of high stress or traumatic situations. During these times, the "emotional energy" (for lack of a better term) that is expelled may imprint itself on the surrounding environment in the types of mediums discussed above.
Residual hauntings are sometimes difficult to investigate because, according to popular theory, atmospheric, environmental, geographic and possibly even siesmological conditions must be right for the activity to even happen. When the investigation is succesful, the cardinal sign of a residual haunt is NO INTERACTION. In a residual haunt, the energy being "broadcast" is not sensient, it is not aware of us, therefore, it cannot interact with us. If there is any intelligent interaction with investigators or anyone else, it cannot be a residual haunt.
There is a popular ghost story that classically illustrates a residual haunt. This story has been making rounds for decades, if not longer, and it's origin would probably be impossible to trace at this point. There are several variations, but they all involve a man who was in love with a woman. He was supposed to meet her at a restaraunt, and they would run away together. Most versions have this as a forbidden love for one reason or another. In some versions, the woman stands him up, in others, he was killed on his way to meet her. They all end up with him, long dead, appearing day after day, or sometimes on the anniversay of the tragedy, at the same restaurant and sitting at the table where he was supposed to meet his love. He doesn't see anyone, interact with anyone, even seem to know that anyone is there. A classic residual haunting.
A legitimate residual haunting is not dangerous and can be quite interesting, even enterntaining, once it is understood. However, to the person who does not understand these things, there may as well be no difference between a residual haunting and an intelligent haunting, they are still just as scary. The key to overcoming this, and our responsibility as investigators is simply to educate the clients that are witness to this activity. In the immortal words of Scool House Rock, "Knowledge is Power!!!"
