In the Islamic context in which the word is more commonly and almost exclusively applied, Sunnah refers to the exemplary customs and conducts of the Prophet Muhammad. As such, sunnah are to the Quran what the Bill of Rights is to the U.S. Constitution--as authoritative and primary a complement to the original revelation.
The Prophet himself, however, never formulated the concept of sunnah in relation to himself. That was the work of early Muslim scholars who developed the concept in an attempt to recreate and codify a picture of Muhammad's life in such a way that it could be closely followed, or at least approximated, by Muslims. Sunnah in that context means not the "trodden path," but "the way of the prophet."
Sunnah is often confused with Hadith. The difference between the two is slight, and mostly esoteric. Hadith are also compendiums of customs and precedents and sayings of the Prophet Muhammad, but they come from several early sources, some of which aren't judged as authentic or definitive as others.