This article is from the Theatre FAQ, by aku@leland.Stanford.EDU (Andrew Chia-Tso Ku) with numerous contributions by others.
A sellout show does have a potential silver lining: the theatre may
begin to sell standing room. Provided that the theatre can accomodate
standing room (for example, the Broadway Theatre doesn't) and the
day's performance is expected to sell out, standing room is usually
sold first thing when the box office opens at 10am. Unfortunately,
not many shows sell out these days; PHANTOM and HAMLET are among the
recent ones that have and thus offered standing room. If you can get
standing room, they are an excellent buy: typically, they are $15 or
$20 for spots at the rear of the orchestra section (where seats cost
$67.50 for most musicals). To find out what time you should start
standing in line, ask the person in the ticket booth the day before,
and get there 1/2 or 1 hour before the time he gives.