One of the great mysteries of SEO is the Google Sandbox. It's nothing more than a theory or speculation because Google has never confirmed its existence. Basically the sandbox theory came about because Webmasters would create a website, build some links and for no real apparent reason the site drops below 100 in the rankings and no matter what you try and do, it doesn't budge.
This process where you can't rank your site, no matter what you try and do, is what we refer to as the sandbox. It tends to happen more in very high competition niches like credit cards, insurance, vacations and plane tickets.
In the first place, you want to avoid getting in to the 'box, and there are several ways this can be done. The first thing you should do is to be careful about how many links you get in the beginning. Submitting your new site to thousands of directories is sure to trigger some filters because it's not seen as natural. Similarly, a new site with thousands of pages could trigger a filter because websites generally grow over time.
The best thing to do is to start off getting links slowly, submitting to a few of the biggest article directories, and then wait for your site to be indexed. Add some more content to your site and then submit to some do follow social bookmarking sites. Consistently build just 2 or 3 links each day along with adding new content and you should be able to avoid getting placed in to the sandbox.
If you find that your site isn't breaking in to the top 100 results after initially ranking high, chances are that you have been sandboxed until Google can figure out if your site is legitimate or not. Don't get discouraged if you are in this position, trying to get some links from very high authority sites will help matters as will consistent link building. It may take weeks or even months for Google to take off this mysterious filter, but if you keep building good links (directory submissions are not really good links) then the benefits will pay off in the long term.
The absolute worst thing you can do is to leave your site because it won't get out of the sandbox without you building more links and adding additional quality content.