The sales order status represents the overall status of an entire sales order. The sales order status does not have a direct effect on the quantity on hand(QoH) stock levels. In particular, moving a sales order to the "Completed" status does not update QoH stock levels (since stock levels are updated by packing and shipping sale shipments).
The sales order starts with the "Draft" status, which is equivalent to an editable status. In this status all fields on the sales order are editable. From the "Draft" status, the sales order can be moved to the "Committed" status. This is not required (a sales order can have shipments created and shipped against it, or have shipments cancelled(deleted) or be marked with a "Completed" status, even while still in the "Draft" status) but is useful to track which orders are still in the process of being created vs which orders represents firm commitments to customers.
Items on sales orders in the "Committed" status are treated as "Reserved" and affect the remaining after reservation and available to promise quantities for the location selected as the sales order origin. When a sale is finished the sales order can be moved to the "Completed" status. As mentioned above, this does not affect the quantity on hand in any way. Moving a sales order to the "Completed" status removes or releases reservations for any items on the sales order that were never shipped.
A Sales order in the "Completed" status does not appear by default on the Sales Order View screen, that lists all sales orders, but changing the filter on that screen to include Completed sales orders will show them. A sale can also be deleted using the "Cancel" order menu item on the action's menu of the sales order detail screen. This changes the sales order to the "Canceled" status. As a side effect, it also updates all shipments for the order and moves them to the "Canceled" status as well (which means any modifications to stock levels from those shipments are voided). An order in the "Canceled" state can be moved back to the "Draft" status, but any canceled shipments will remain canceled and have to be recreated.