Dave has locked Katie out of this file.
Look at what's going on here with Dave and Katie. Dave is editing a spreadsheet from a library. A few seconds later, Katie tries to do that too. But since two people can't work on the file at the same time, Katie gets the File in Use message.
If Dave closes the file, it will get unlocked. But what happens if he doesn't close it? What if he goes to lunch for two hours? Well, then Katie will be locked out of the file until he gets back.
In situations like this, Dave should ideally use checkout before he edits the file. How does one check out a file? The next page will explain.