Basically, everyone worked on either internal tools (better reporting for testers, etc.) or new initiatives ("SQL Pony" or some such). Plus they fooled around some and made a video.
So not really a "down tools" week as much as it is a "work on something tangentially related to work (with your tools) and have a little fun" week.
So they really didn't stop working for the week. They just re-focused on some of the things they should have been doing all along in order to make development easier. Everyone seems to forget that tools and infrastructure should come first.
Because they shouldn't - at least not in the early stages.
Once you know what you're making, shipping product comes first through about fiftieth. If tools get you on the shortest path to shipping product then do that, but ship.
It's Jobs' biggest contribution to theory. Real artists ship.
If you don't know what you're making, or should make next - which is a real challenge for big companies - then what RedGate do (and they're an awesome company) makes a lot of sense.