The "Cancel checkout" permission setting on the space admin page does not seem to have any effect.
Scenario:
1. Attach a file in space A.
2. Within space A give user1 permission to cancel checkouts on the individual level.
3. Let user2 checkout file A.
4. Error: When user1 browses the attachments no link is presented to cancel/undo the checkout.
Referring scenario in above comments, user1 have to go to Advanced Tab to cancel/undo checkout.
If user is assigned with "Cancel Checkout" permission, Then he/she will be able to see Undo Checkout link in below given location.
Path to undo checkout: - Browse space > Advanced tab > Undo Checkout (Link is available under Checkout section on left side of you screen)
On Click on Undo Checkout link will display all checkout file from current space along with Undo Checkout link.
Please refer Description/Features column which is available @ http://confluence.atlassian.com/display/CONFEXT/Attachment+Checkout+Plugin
~Riz