Naked and semi naked boards in the Furby: Chipworks Adafruit Furby taxidermy and partial tear down. Additional animatronic hackings at Robotz SF.
Step 1: Adding the OFF switch. (Also main power and RESET)
To add an on/off switch, just put a small switch between the red wire and the little board. You might as well solder on a white wire to the reset wire (white) on same board. Could also tap ground wire now too (black on board). When/if you discard the battery power, this is also where you can provide 5 volt (500 mA) power for the entire Furby.