There are several variations of bug parties. At some, there is one member of the 'orgy' that is HIV positive. Only this individual and the host know his positive status. The remaining participants know that there is an infected person in the room, but do not know his identity. The participants then partake in a night usually filled with alcohol, drugs and of course unsafe sex.
In other variations of a bug party, there is one person who is not infected with HIV, however the other participants are or may be. Every one is aware of the person who disease free. The HIV negative person then allows the infected guys to have unprotected anal sex with him.
Ahh, to be gay AND epically stupid. Now that's a helluva combination.