A contestant may be given the loser edit for the entirety of his/her appearance on a show (in which case he/she is usually eliminated relatively early on) or for an individual episode. The latter situation, though traditionally used to foreshadow and/or validate the contestant's elimination at the end of the episode, has recently been used more frequently by more clever editors to create suspense and surprise when the seemingly struggling contestant ends up exceeding expectations.
This technique is most often used by competitive reality shows concerned with a specific skill--such as cooking (Top Chef), fashion design (Project Runway), or modeling (America's Next Top Model)--rather than non-skill-specific competitive reality shows like Survivor. It is also primarily used by shows that employ an on-screen judge or panel of judges to make decisions regarding eliminations, as shows that include audience participation (like American Idol) are wont to draw outspoken criticism from fans of the contestant getting the loser edit.
Antonym: winner's edit