The Windows Explorer will use this interface to communicate with applications to resolve sharing errors that occur when users are managing the context of the file system. For example renaming a folder when an application has a file in that folder open will fail. this helps the user resolve this issue.

Applications register the file they have open in the Running Object Table (ROT) and then implement this interface on the object registered.

http://msdn.microsoft.com/en-us/library/ms695276(VS.85).aspx