In addition to @zengr's answer above, for this those running into Device or resource busy when using this Ralink RT5370 dongle, i.e.:

~ $ sudo iwconfig wlan0 mode Monitor 
Error for wireless request "Set Mode" (8B06) :
    SET failed on device wlan0 ; Device or resource busy.

There is, PCMIIW, [no generic way][1] to find out which process is using device wlan0, but chances are it's ifplugd:

[1]: https://unix.stackexchange.com/questions/165697/how-to-kill-processes-using-a-network-interface)

~ $ service ifplugd status
wlan0: ifplugd process for device wlan0 running as pid 1234

~ $ sudo ifplugd -k -i wlan0            # kill ifplugd for wlan0
~ $ sudo ifconfig wlan0 down            # iFconfig 
~ $ sudo iwconfig wlan0 mode Monitor    # iWconfig
~ $ sudo ifconfig wlan0 up
~ $ iwconfig
wlan0     IEEE 802.11bgn  Mode:Monitor  Frequency:2.412 GHz  Tx-Power=20 dBm
      Retry short limit:7   RTS thr:off   Fragment thr:off
      Power Management:off

In addition to @zengr's answer above, for those running into Device or resource busy when using this Ralink RT5370 dongle, i.e.:

~ $ sudo iwconfig wlan0 mode Monitor 
Error for wireless request "Set Mode" (8B06) :
    SET failed on device wlan0 ; Device or resource busy.

There is, PCMIIW, [no generic way][1] to find out which process is using device wlan0, but chances are it's ifplugd:

[1]: https://unix.stackexchange.com/questions/165697/how-to-kill-processes-using-a-network-interface)

~ $ service ifplugd status
...
[...] wlan0: ifplugd process for device wlan0 running as pid 1234

~ $ sudo ifplugd -k -i wlan0            # kill ifplugd for wlan0
~ $ sudo ifconfig wlan0 down            # iFconfig 
~ $ sudo iwconfig wlan0 mode Monitor    # iWconfig
~ $ sudo ifconfig wlan0 up
~ $ iwconfig
wlan0     IEEE 802.11bgn  Mode:Monitor  Frequency:2.412 GHz  Tx-Power=20 dBm
      Retry short limit:7   RTS thr:off   Fragment thr:off
      Power Management:off