One of the words that people are looking for when they look up que is queue, a word that means “line” (as in, “We waited in the ticket queue.”) Sometimes people are looking for the homonym cue, or “a signal to start or do something” (“The lights just went out—that's my cue to start the movie.”).

Which is correct on queue or in queue?

It is perfectly correct English. I do it every morning on the way to work. The phrase is often used for circumstances such a a queue of traffic. You are sitting in your car in a queue.

What does it mean when something is in queue?

A queue is (1) a line of people waiting for something, and (2) a hair braid worn down the back of the neck. As a verb, queue means get in line or place in line. Both these homophones are often used with up—cue up meaning prepare [something] to start on cue, and queue up meaning get in line.