Checking out a file copies the file version in the vault to your local working folder. Once a file is checked out, it can be edited. Only one member of a team can check out a file at one time. No one else can modify a checked out file until it has been checked back into the vault.
Once you are finished editing a file, you can check the file back into the vault to store your changes or to cancel any changes and return the file to the Vault as the version it was before you checked it out.