Does this term relate to how long it takes google to index your site or does it refer to how long it takes Google to crawl the site?
Neither. Its the term used to describe why sites that should rank highly don't during the first 18 months.
Sandboxed sites are very much indexed by Google, but those sites have a hard time ranking for keyword phrases, no matter how competitive they are.
i agree Sandbox is not probably a penality it is just a way to find crediability of new site against sites already ranking on top. ime it also depends on your niche.
I've heard a lot about the google sandbox... but it seems to be there, but as you mentioned Mong, can vary from site to site and according to niche. What would you guess is the amount of time it takes to get out of the sandbox? Also, if someone just moved sites from one domain name to another... wouldn't the new domain name suffer that same sandbox effect.
New sites can get indexed very easily it just depends on the tactics used. My latest site(Searchnology.com) is only 30 days old and is already indexed in Google, Yahoo and MSN. However the Google PR will not move for a while. My stock trading site got a PR3 in 3 months so I can testify that it is possible to move quickly but it depends on your approach. Good luck. (Be aware that SERP rankings are another issue all together)