[avalaunch]

It's called 'walking the guest' and it happens somewhat frequently. Hotels always overbook when they can and normally it doesn't cause any issues because there are almost always enough cancellations and no-shows to compensate. But it does happen and probably more often than you'd imagine. Typically the late night arrivals will be the ones getting walked, especially if they're only staying for a single night, and even more so if they booked through a third party site like Priceline. I am not sure if it's legally required or not but the hotel that is walking you will usually set you up in a nearby hotel and pay for the first night. Of course if the nearest hotel with an opening is 20 miles away, this could be quite frustrating.

Edit: If you are going to be arriving late, call the hotel in advance and let them know and you greatly decrease the likelihood of getting walked as they will tend to walk someone before you instead.