Check out Chapter 5 of the Art of Intrusion by Mitnick. If you want to use amazon’s look inside a book, the details of it are on pg 104 - 105. A hacker named “adrian” found a couple of fairly big exploits from Excite, MCI etc. and would routinely forward the info to sysadmins. One day, he found one from the New York Times, forwarded the details, and the sysadmin went nuts and called in the FBI and ended up prosecuting him as a computer criminal.
No, what is the second level? 
Yes, thats a completely different definition of hacker and, AFAIK, came after all the other definitions. The first definition of a hack was an incredibly bad and ugly piece of code and a hacker was an incompetant programmer who could only hack. Then came the definition that a hacker breaks into systems, then came the great hacker vs cracker debate about malicious vs learning as a motive for breaking in. Finally, people started using hacker to mean someone who wrote elegant code which is a complete opposite of the original definition. Given that all 4 definitions are still in use, it really gets quite tedious when people try and bring up hackers vs crackers.
The Jargon File only has benevolent definitions for hacker. I’ve never heard of it starting out as negative, but my family is in the younger range of greybeards–so if it switched previous to '70, then dunno.
As to the OP, mostly a repeat of the above ^. Most cracking by teens is done by tieing together scripts and tools out and about on the web (which were probably made by more learned persons.)
However, until you get up to cryptography, most of what breaking into other peoples stuff involves is figuring out how something works and taking advantage of flaws. For instance, if you wanted to break a four-legged table to the ground you can either try to bang on the top OR you can kick the leg posts from the side. Most people will go for the legs, just because people fundamentally understand that this is the weak point of the table–it just wasn’t intended to have to deal with horizontal force. Which is the reason why there is so much code in the world that is breakable: People naturally build things to do the tasks they are meant to perform, and NOT to be able to do all the 8000 possible maniacal things you could also lump upon it.
If someone comes with a complaint saying that their 14 year old can break down the table they bought off of you simply by kicking out the legs–the general response is “Don’t kick the table legs!” However, in the programming world you can’t do that. And there literally are 8000 different maniacal things someone can lump on your code–and no matter what you will never be able to think of them all.
So, if some kid sees your product or protocol or whatever, he doesn’t need to be a genius. He just needs to have an idea of the computer world version of physics–and once he has that, knowing where the weak points are can be every bit as instinctual as anyone looking at a table. And as has been mentioned, most people who just “get” the way computer things work have much better things to do than breaking it.
I guess I should read that book. But what did he do that would result in prosecution? If a sysadmin called the FBI and said he had a security hole in his system, wouldn’t they suggest he just fix it? And what sysadmin would after being informed of a security hole would start off calling the FBI, rather than running to a terminal and fixing the code? If he did the latter, likely some teenager in Portugal would have crashed his system before the cops did anything. All the big bosses at the NYT would have noticed is their computer system was dead, and fired his ass. In the private sector, they expect results.
Another factor might be that people in secondary education simply don’t have the sort of workload and obligations yet that adults have. If you are reasonably intelligent school isn’t that onerous IMO. For example in my case: I often skipped homework that wasn’t to be handed in; when I was called I just read the answers off an empty sheet. Got excellent grades while putting in perhaps 5 half work-days (by adult reckoning) a week. I had time to play around with electronics and pursue a number of other hobbies. Now with work where I have to run all day just to stay in the same place, some volunteering, social life and regular exercise, I often come home, hit the bed and am out like a light.
‘Gay’ is a very common term for homosexual, especially male homosexual. Large numbers of gays get annoyed when someone uses the term ‘gay’ to mean ‘bad’ or ‘stupid’, because it’s a denigration of homosexuals in general.
(Some of the brighter bulbs in the world use ‘lesbian’ in a perjorative sense as well. I can search the SDMB for the thread where this is mentioned if you want.)
Not really, no. It was a sense of the original definition that goes back to the MIT definition of the term. Wikipedia’s take:
Exactly. If it were possible for kids that age to learn medicine, build their own cars, design and test bridges or houses, etc., inexpensively and in their own free time, they’d be doing it. I started programming when I was about 6, was able to crack shareware by 12 or 13, and I’m sure I could’ve been breaking into systems over the internet if I’d been interested.