Guys,
Imran's question is not related to the basic functionality of "call-waiting" feature.
To illustrate his question, suppose you're calling your friend.
CASE 1
If your friend has "call-waiting" inactive :
He will get nothing and will miss your call.
You will get a normal busy tone.
CASE 2
If your friend has "call-waiting" active:
He will be able to receive an incoming call alert in the middle of his active call.
You will get a normal ring tone, and depending on your carriers, the mobile network will signal you back that the called number is currently busy and your call is currently placed on waiting.
Some phones (like Nokia) make use of this signal and display a popup message "waiting" indicating your call attempt is now placed on waiting.
iPhone doesn't display anything to the "calling" party.... Imran is just asking whyyy? please reread his posts. They should be clear now.