Here's a screenshot of KBabel. Main window is split in four boxes.Upper left edit box is read-only and contains the current msgid field from the opened PO-file and it's english text. Bottom left edit box is msgstr field related and here you can edit the translated text. The right side of the window is for searching translated strings in PO-files, compiled catalogs or user defined files. More on this below. For convenience KBabel has toolbars to speed up many operations and for high work people there are many shortcuts.
Shortly, I would explain that a msgid entry can be in three states:
which obviously mean there's no translated text associated with msgstr
msgmerge had tried to match better translated string looking in rest of PO-file entries. This does not work perfectly and you must edit the translated text to fit the current english text.
obvious this mean current msgid entry is translated.