From VASTIM.net:
Special Transponder Codes
In addition to being used as a method of identification, your transponder can also be used to transmit a signal for help to ATC. I have listed some of the codes below:
7700 - Emergency, this will be an indication on the controller's screen that your aircraft has experienced an emergency. Just as a reminder, it is OK to declare an emergency on VATSIM just as long as you ask the controller for permission first, if they decline the emergency, you must disconnect..
7600 - Radio Failure, this code is not used very often on VATSIM because we have both Text and Voice communications. If you would like to simulate lost comms procedures, make sure to check with your controller first.
7777 - Military Interceptor Operations, consult the VATSIM Special operation regulations before engaging in any Military Interceptor Operations.
7500 - Hijack, this code is a part of the tutorial for informational purposes only. Simulating hijackings is ABSOLUTELY NOT ALLOWED on the VATSIM Network. Should you set your transponder to this code you will automatically be removed from the network. Please do not "Try to see if it works", Users simulating a hijacking are subject to disciplinary action up to and including permanent suspension of their PID.