Most of you might be aware that a Waitlist (WL) ticket will get to RAC (Reservation against cancellation) before getting Confirmed (CNF). If there aren’t enough cancellations by other confirmed passengers, your ticket might be finalized at RAC status, which makes you eligible to travel, but only with a seat, not a berth. On the other hand, if the chart is prepared with your ticket status still in WL, your name will not appear in the chart and you cannot board the train.
Now, let’s say you book two train tickets (you and your friend) and after moving from, say, a waitlist of WL12 and WL13, your tickets are finalized at RAC 71.
On the final chart, you might find this as some RS8 71 (and another ticket too with same RS8 71), where R represents RAC, S8 represents the coach (this can be anything, S1, S2 and so on) and 71 the seat. Please note that only a single berth (with number 71) has been allotted to you and your friend and hence you do not get a berth each to sleep. You can adjust on a single berth though, if you can.
This is not so comfortable for many people and hence you will find people deciding not to travel with a RAC ticket. When it comes to canceling a RAC ticket, it is treated just like a W/L ticket and you will almost get the same (full) refund as when you cancel a W/L ticket.
Note: There are almost always people who decide not to travel at the last movement so if you have an RAC ticket, you can always ask the TTE if there are any unattended berths. After he assesses the total number of available berths, he provides them for RAC holders (he might ask you for a small tip, please don’t ask me if it is legal; I do not know).