The origin of the Lilith story comes from the Talmudic commentary on the verse in Genesis 1:27 ...male and female he created them... Various explanations of this are put forth in different midrashim. One was that until Eve was created, Adam was a hermaphrodite. (which is why the Hebrew word for face, panim, is plural in form). The relevant story, however, is that of Lilith, Adam's first wife. She refused to have sex with Adam because he insisted on being on top, and finally used the power of the Tetragrammaton [1] (the proper pronunciation of the Lord's holy name) to fly out of the Garden of Eden. Meanwhile, Eve was created from Adam's rib as a more submissive wife who would stay on the bottom during sex.
  When Lilith landed, it was on the shores of the Red Sea. It was here that she met with the demons' beings who were souls left over from creation. They were also all male and perfectly willing to be on the bottom, so they made Lilith their queen. Her husband is named Asmodeus in some folk tales. There are other folk tales which name her son as well.
  According to legend Lilith haunts the wilds and deserted cities. She is mentioned somewhere in the Wisdom books, I forget where. Proverbs, I think [2]. Traditionally she''s associated with dangers to pregnant women and small children and their are traditions associated with specially inscribed coins which are meant to protect against her.
  This is all from memory, so I'm sure there are a few omissions and/or inaccuracies in it. The Reader's Encyclopedia has a short article giving some of the details above. Also worth checking out are Howard Schwartz's collections of Jewish folktales, particularly "Lilith's Cave".
  -- Don Hosek