For those who were already exposed to any sort of Bill's IDE's, they might know what a solution is, for the rest who don't ....
A solution in AVR Studio 5.0 is a structured representation of one or more projects that are organized in AVR Studio 5.0. These projects work together to create a single output file (.elf in our case). All the status and project information of a particular solution are stored in two types of solution files. These solution files store settings of a specific solution. They are as follows:
Solution (.avrsln) File: The solution or .avrsln file is a text-based solution file that contains information about finding and loading the name-value parameters for the persisted information and projects that are being referenced in the solution. Therefore, the .avrsln file organizes projects, project items and solution items into the solution.
Solution User Options (.suo) File: The solution user options or .suo file is a structured file stored in a binary format. The .suo file identifies the user information that is used to save into streams with the name of the stream stored in the file itself. This file also records all of the options that are used to work with a specific solution. Some of there are TODO tasks in solutions, breakpoints, bookmarks etc., If you are using a source control system, it is recommended to check-in this file so that your peers can view the TODO tasks and bookmarks in their studio. But tell your peer not to be surprised if he happens to see all the breakpoints you added in the project :)