The first sense of sunna is in the context of shari'a rulings, in which sunna is synonymous with the mandub or "recommended", meaning something that one deserves a reward in the next life for doing--such as using the miswak to clean one's teeth before prayer--but is not punished for not doing. It can be contrasted in this context with the "wajib" or obligatory, meaning something that one is rewarded in the next life for doing-- such as performing the prescribed prayers--and deserves punishment in the next life for not doing. The sunna in this sense is at the second level of things Allah has asked of us, after the wajib or obligatory. 

A second sense of sunna is in the context of identifying textual sources, as when the Kitab, meaning the Qur'an, is contrasted with the sunna, meaning the hadith. In this sense, sunna is strictly synonymous with hadith, and is used to distinguish one's evidence from that of the Qur'an. One should note that this is quite a different sense from the above-mentioned meaning of the word sunna, though sometimes people confuse the two, believing that the Qur'an determines the obligatory, while the hadith determines what is merely sunna or recommended--but in fact, rulings of both types are found in the Qur'an, just as they are in the hadith. 

The confusion and non sequiturs that often result when Muslims discuss the sunna could perhaps be better avoided if these distinctions were kept in mind.