Toontown Beta refers to the time of development of Toontown Online prior to its release to the public on June 2, 2003. During this time, the game had no cost to volunteers.
There were two phases of beta development: Beta 1 and Beta 2. The exact bug fixes and additions can be found on the release notes section of the test website.
Beta 1 was the first of public testing, and began in August 2001. During this time, many common gameplay elements that are currently in the game were added, as well as certain phrases that were removed such as "You're a jerk!". Unfortunately, the game was very unstable at this time, resulting in the common loss of data, including the deletion of toons, loss of gameplay data, and the loss in-game achievements. Testing lasted until January 16th, 2002. The game servers were noted by Disney Online Worlds as being "accidentally left on... by some forgetful developer". [Citation Needed »]
Beta 2 began on September 10th, 2002. This phase of testing holds much resemblance to Beta 1, in that the game was still gaining stability. Beta 2 only lasted one month until October 21st, 2002. Many minor optimizations took place during this month, mainly consisting of crash fixes related to various gameplay aspects and reduction of difficulty in some ToonTasks. Some of the more prominent updates that occurred in Beta 2 were the adding of Toon Headquarters, clothing stores, new ToonTasks, gag shops, the adding of the new Toontown Central that we all know today, and jumping, There was an issue where Toons that did not choose the Sound track had to deliver a bugle to Professor Pete, thus they got stuck because they chose the Toon-Up track instead. This was then fixed as developers changed the quest requirement to a squirt gun, rather a bugle. Environmental changes were made in the Toontorial during Beta 2. Minnie was also added to the Toontorial during Beta 2 also.
"Limited engagement", otherwise known as "sneak preview" refers to the discounted pricing for those playing the game after the conclusion of Beta 2, and before the official release of Toontown Online, on June 2nd, 2003. During this time, those who signed up for Toontown would receive a discount of roughly 40% off their first month of membership. Specifically, the prices were $5.95 for their first month, and $9.95 for each month after.
The official statement, found on the Toontown Webpage, read the following:
Beta 1 website 
Beta 2 website 
Toontown Beta Description
|“|| Toontown is a happy place where Toons live and play. But there's trouble in Toontown!
Evil robots called Cogs are trying to turn this colorful Toon world into a black-and-white metropolis of skyscrapers and businesses.
Mickey and his friends are calling on all available Toons to help stop these mechanical menaces by pelting them with cream pies, seltzer water, flower pots, and lots of other toony gags. Remember, if you make a Cog laugh, he falls apart, because as every Toon knows, Cogs just can't take a joke.