My sound will only work with headphones plugged in when I unplug a red light glows in the socket.

Plug the headphone in and out of the socket couple of times to turn the digital sound off.

System Preference > Sound

Make sure that the box Mute is not checked.

Reset SMC.

http://support.apple.com/kb/HT3964

Choose the method for:

"Resetting SMC on portables with a battery you should not remove on your own".

Some sound settings are stored in PRAM.

Reset PRAM.

http://support.apple.com/kb/PH4405

Hope this helps.

The red light means the port is still live.

The cause is a little leaf switch that is pushed over by the headphone jack when you insert it. Sometimes these stick.

Try inserting and removing a jack a few (dozen) times.

If that doesn't free it you may attempt to tease it with a slim non-conducting tool (like a plastic toothpick). Ensure the Mac is not only shut down, but unplugged if you try this.

And be careful; the leaf is fragile and it's an expensive bit to get to and replace, in fact on some models it's directly on the logic board.