A checkout icon appears when someone checks out a file. Place your pointer over the icon to see who has it checked out.
What do other people see when a file is checked out? They see the checkout icon appear for the file, showing a green square with a white arrow. In the picture, you can see that the Contoso Marketing Strategy file is checked out. If you rest your mouse over a checkout icon, you can see who it is checked out to. In this case, Ellen Adams has the file checked out.
What happens if people try to edit this file anyway? They will get the "File in Use" message explaining that the file is locked for editing by Ellen. They can open it as read-only, but they will see the version of the file prior to the one Ellen is working on.