Red chilies are a central ingredient in Thai cuisine, but Thai cooks also use green and yellow chilies, hence the three famous colors of Thai curry: green curry, red curry and yellow curry. Each Thai dish is usually made with a certain chili, although you can always easily substitute red chili if you can't find green or yellow. Characteristic of the Thai sense of humor, the hottest of these chilies, called phrik kii noo, literally means mouse droppings, but they're also popularly known as 'bird's eye chilies'
, simply because looking at one from the stem-end can appear like the eye of a bird. But peppers of all sizes and shapes can be found in Thai cooking, including sweet bell peppers.
Substitutions: If you can't find fresh bird's eye chilies for your Thai cooking, a good substitute is dried chili flakes, available in any supermarket spice section (also called crushed chili). Failing that, you can use cayenne pepper to spice up most Thai dishes, although do note this form of chili can give your dish a reddish coloring (which is sometimes desirable, if you're cooking a Thai red curry, for example).
Health Note: If you have a strong stomach, chili can be very good for you. See my full article on the subject: Chili, Friend or Foe?.