The police get a call saying that a guy in a red shirt and blue jeans is selling drugs from a green Oldsmobile at the corner of East 40th and St. Clair. They go to East 40th and St. Clair, and sure enough, there's a green Oldsmobile parked at the corner, and a guy in a red shirt and blue jeans sitting inside it.
Given that the vast majority of police activity depends upon information they receive from others, rather than the officers' own observations, it makes sense that the various sources of that information might control how the 4th Amendment is applied. Basically, as Melvin explains, people who provide information to the police fall into three broad categories: the anonymous informant, the known criminal informant, and the identified citizen informant. (The court cites the Ohio Supreme Court decision in Maumee v. Weisner, which gives a much more detailed analysis of this split.) The first two require some showing of reliability: generally, the police can't make a stop based on the tip unless they are able to corroborate some aspect of the tip pertaining to criminal activity. In the example of the guy in the red shirt and jeans in the green Oldsmobile, if the tip was anonymous, it wouldn't be sufficient to permit a stop unless the police also observed something indicating drug activity.
That makes sense; since the tipster is anonymous, there's no penalty to him for giving false information, and thus no reason for him to be reliable. The opposite is true for the identified citizen informant: if a person's going to identify themselves to the police, there's more likelihood that what they say is true, and so the police have a right to rely on it without further corroboration.
That's pretty much what happened in Melvin: a citizen informant had called and said he'd observed two males pull up to a house, go into the house and retrieve an "item," which they then put in the trunk and drove away. The informant had observed this on about a dozen prior occasions over the previous few weeeks, and the police testified this was consistent with drug activity. They responded to the call, saw the car, pulled it over, and found twelve grams of marijuana in a glass jar in the trunk. (I don't know about you, but I feel much safer just reading that.)
Melvin, one of the two people in the car, contested the stop. The court noted that the evaluation of a tip actually involves two considerations: the reliability of the tip, and its content. Here, the reliability aspect was met by the fact that the tip was from an identified citizen informant. Two members of the court found that the content was insufficient, though: observing someone putting an "item" in a trunk, without any further description of that "item," wasn't enough to believe that drug activity was taking place.
Melvin's an excellent read on the subject of tips and police stops, but it's also interesting on another point. After the police found the marijuana, they told the two subjects that they were under arrest for "violation of state drug law," and asked if any of them had any other contraband, implying that if they 'fessed up now, rather than having it discovered at the jail, they wouldn't be charged with it. Melvin was dumb enough to believe this, and volunteered that he had two packets of cocaine in his shoe. (The cocaine was actually what he wound up being charged with.) The state argued that he thus consented to the search, but the court found that there was no basis for an arrest -- the amount of marijuana found was a minor misdemeanor, and the police can't arrest someone for a minor misdemeanor, except in narrow circumstances which weren't present here. Since Melvin couldn't have been arrested, Melvin's consent on the basis of his erroneous belief that he could be wasn't voluntary.
The state might could have argued the issue of arrest more strenuously. It's obvious that the police weren't arresting Melvin for simple possession of marijuana, but for trafficking in it, which is a felony and thus an arrestable offense. Whether he could have been convicted of it on such a small quantity is another question, but guilt isn't relevant; the only issue on the search is whether the police had probable cause to make an arrest.
That's a tricky question in itself. On the one hand, the identity of the "item" had been resolved: it was definitely drugs, and coupled with the police testimony that transporting it around in this fashion was consistent with drug activity, that might have been to establish probable cause for a trafficking arrest. On the other hand, that argument would be a much easier sell if the trunk contained a kilo of coke instead of a half-ounce of marijuana in a glass jar. Besides, all that still do the state any good: since the stop was ruled illegal, everything flowing from that is a fruit of the poisonous tree.
I didn't care for the opinions of Justice Rehnquist, God rest his soul, but he was right on the money with his observation that court decisions on warrantless searches are "something less than a seamless web."