Code Blue is a phrase used by a member of the Galactica's crew when he or she identifies a cylon aboard. Chief Tyrol forcefully said it shortly after he recognized Cavil as a Cylon agent and tackled him. (Lay Down Your Burdens, Part II). Presumptively, it designates some sort of emergency, and would be applicable to the discovery of a previously unknown Cylon agent. The podcast for Lay Down Your Burdens, Part II says it is what someone would be shouting "if you saw a Cylon and you knew it." He continues to say that it was chosen because code red was too reminiscent of Star Trek's red alert.