We can intuitively see this as a machine, A, that tries to decide what position the switch in the figure below is in. He only knows that with probability 1/2 the switch is "up" and with probability 1/2 it is "down".
Which of these sequences do you think is random and which is not? One has been produced by a series of coin flips (and ought to be random) whereas the other has been produced by taking a prime number, p, computing 1/p and extracting a set of consecutive decimals in this expansion.
Goldreich & Levin: "A Hard-Core Predicate for any One-way Function". Proceedings FOCS 1988.
Goldreich et al: "How to Construct Random Function". J. of ACM no 4 1986.
Goldreich et al: "On the existence of Pseudo Random Generators". Proceedings FOCS 1988.
Håstad et al: "Construction of a pseudo-random generator from any one-way function".
Proceedings STOC 1989, 1990.
Yao: "Theory and Applications of Trapdoor Functions". Proceedings FOCS 1982.
Good introductions to the theoretical aspects of cryptography are found in:
Diffie & Hellman: "New Directions in Cryptography". IEEE Trans. on Info. Theory 6 1976.
Goldreich: "Foundations of Cryptography". Lecture notes. Computer Science dept. of Technion, Haifa 1989.