You will get waiting for busy host for a number of reasons. If you are trying to download say 3 files from 1 host, and their upload limit is set to two per person, you will get this message or Waiting in line no x (dont ask me exactly what the difference is).
If you are downloading from some hosts at a low rate the download may stop periodically and you will get the message. in these cases lime wire tries to reconnect every minute or so and will hopefully reconnect, and continue the download. Be patient and you will most likely get your file in the end.
Whilst the message is showing no download is taking place. It means what it says The host is busy and cannot, at that point in time do the download. Experience will show you what is happening on a host by host basis.

Also you will get some hosts who show a permanent waiting for busy hosts sign. You will probably find if this stays up for 10 or 20 minutes that for some unknown reason, you would be better off avoiding this host and trying elsewhere.

I hope this helps