Sometimes referred to as "Intruder Detection" methods.
Once an account has been locked, that user will not be allowed to authenticate.
The lockout may be temporary (automatically ending after a specified period of time) or permanent (remaining in effect until an administrator resets the user's password).
For example, if Account lockout threshold = 5 then after five guesses of the user's password the user's account could be automatically locked out for Account lockout duration = 30 minutes. Then after 30 minutes elapses the attacker gets another 5 attempts at cracking the password, after which he is locked out again. Obviously it will take some time this way to crack a password.
On the other hand, if Account lockout threshold = 5 and the user hasn't had her coffee yet, she might easily mistype her password 5 times in a row and lock herself out. Then comes the proverbial call to Help Desk saying "I can't log on to my computer" and precious business resources are consumed, both in terms of the time spent resolving the problem and the loss of productivity for the user.
Perhaps all he's interested in is preventing the user from logging on to the network. In this case the attacker can simply enter any random string for the user's password 5 times in a row and suddenly the user is unable to log on to her computer. Again an annoying call to Help Desk and lost productivity on the user's part. This demonstrates how an attacker can utilize account lockout to create a Denial-of-Service (DoS) condition.
While these examples seem somewhat contrived since they assume an attacker has physical access to the network, it turns out account lockout is much more than just typing wrong passwords into the Log On.