In goverment institutions, burn bags are most commonly used for the collection of classified materials that are to be destroyed. Specific policies vary, but generally full burn bags are periodically collected by cleared building staff, and completely destroyed (by fire, thus the name). Burn bags containing material classified as Top Secret tend to have extensive paper work involved, while destruction of Confidential material is much less formal. In some instances, more informal burn bag services are used for destroying paperwork that is merely proprietary or sensitive. For example, at NASA headquarters, the regular mail service will pick up burn bags with no classified material in it for destruction, where as classified material requires arranging a special pickup.

In institutions run by the United States goverment, the bags usually have red and white diagonal stripes. This is so they are easily identifiable and more difficult to wander off with. Depending on the sensitivity of the material they can range from paper sacks that are stapled shut all the way to heavy canvas bags that have tamper-proof seals.

As an aside, Spy Game is (as far as I know) the first movie to feature a burn bag. The useage in Spy Game is particularly humorous as Robert Redford's character uses a burn bag, intended to improve security, to hide documents thus subverting security.