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The concept is, a router might have the network prefix provided from more than one routing source. If it does, AD provides a metric for which source, for a particular network prefix, to prefer.
As Martin has noted, Cisco has default ADs assigned to different routing protocols.
So, say for example, a router receives 192.168.1.0/24 from EIGRP, OSPF and RIP, which does it chose? Since, by default, EIGRP has the lowest AD, the router will use EIGRP's information for how to get to 192.168.1.0/24.
Now also suppose, the same router receives 192.168.2.0/24, from OSPF and RIP, but not EIGRP. In this case, by default, it would chose to use OSPF's information.
Static routes also support AD, so if you had:
ip route 192.168.3.0 255.255.255.0 10.1.1.1 200
ip route 192.168.3.0 255.255.255.0 10.1.1.2 20
It would use the second static route, as it has a lower AD than the first static route.
