well as far as i know, there are two different things.
1. Incoming call waiting notification : If activated, when you are in a call with someone and at the same time someone else calls you, you will hear a beep to get notified that, there is another person calling you. then you can answer or reject the 2nd call or also you can put them into conference.
2. Outgoing call waiting notification : when you call someone and s/he is already in a call talking to other person, you will either hear a beep or will see an on screen message to get notified that the person you are calling is already in a call.

now these days all operator support this feature (at least in my country Bangladesh) but some cell phone support only the first one.
my iphone 3g does'nt support outgoing notification but my N900 supports both.