Hi,

>Now in the separate VFP session we try to open tables used in the process. Prior to executing tableupdate we can open and close the table. But once the tableupdate is issued, we're getting "File is in use" error.
>
>So, is it the right behavior? The changes for that table are already happened through tableupdate, though the transaction is not yet closed.

From Help:
When you modify records in a database that is part of a transaction, other users on the network do not have access (read or write) to the records until you end the transaction.

When other users on the network try to access records you have modified, they must wait until you end your transaction. They receive the message "Record not available ... please wait" until the records become available. Because of this, it is important to keep the length of the transaction to a minimum or conduct the transaction during times when others do not need access.
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Maybe the "File is in use" error has the same cause?
Regards,
Viv