When used in its most general and common sense, the word Sunnah is a reference to the overall teachings and way of life of the Prophet Muhammad صلى الله عليه وسلم. However, to be more precise, the word Sunnah is used by different types of scholars to connote very different concepts.  This is because the purpose and goals of the various disciplines are different. In particular, one needs to differentiate the meaning of the word as it is used in general parlance and how it is used as a technical term by specialists in 'aqeedah (creed and beliefs), jurisprudence, Islamic legal theory and the scholars of Hadeeth.
Lane gives the lexical definition of the word "sunnah" سنة (whose plural is sunan - سنن) as, "A way, course, rule or manner, of acting or conduct of life or the like... whether good or bad; approved or disapproved... a way that has been instituted or pursued by those after them." 
As lane noted, a conduct of life may be a praiseworthy way or life or a blameworthy way of life. Lexically, the word "sunnah" could be used for either one. However, in parlance it is usually used for a praiseworthy way of life; in fact, when used in a negative sense, that is customarily made explicit by the context or an additional adjective.
It is not surprising to find this lexical usage of the word in the Prophet's own speech صلى الله عليه وسلم. In fact, in the following hadeeth, the word "sunnah" is used in this sense:
On the authority of Sayyiduna Jaabir Ibn 'Abdillaah رضي الله عنهما who said, "A group of bedouins came to the Messenger of Allaah صلى الله عليه وسلم wearing woolen clothing. The Prophet صلى الله عليه وسلم noticed their harsh situation and that they had been afflicted with need. He then exhorted the people to give charity but they were slow in doing so, until they saw signs of anger on his face. Then a man from the Ansaar came with a container of silver. Then another came. These were followed by others until the signsof happiness could be seen on the face of the Prophet صلى الله عليه وسلم. The Messenger of Allaah صلى الله عليه وسلم then said, 'Whoever introduces a good practise (sunnatan hasanah) in Islaam that is acted upon after him shall have written for him a reward similar to the one who acted upon it without the reward of either of them being lessened in any way. And whoever introduces an evil practise (sunnatan sayyi'a) into Islaam that is acted upon after him shall have the burden of the ones who acted upon it recorded for him without the burden of either of them being reduced in any way.'" (Recorded by Muslim) 
Before discussing the definition of the word "sunnah" as used by different scholars, it should be noted that the Qur'aan speaks about "the sunnah of Allaah." For example, Allaah says سبحانه و تعالى,
(This was Our) Sunnah with the Messengers We sent before you (O Muhammad, [peace be upon him]), and you will not find any alteration in Our Sunnah." (Soorah al-Israa', 17:77)
""The Sunnah of Allah with those who passed on before; and you will not find in the Sunnah of Allah any change."(Soorah al-Ahzaab, 33:62)
"That has been the Sunnah of Allah already with those who passed away before. And you will not find any change in the Sunnah of Allah." (Soorah al-Fat'h, 48:23)
"Sunnah of Allaah" refers to the decisions, laws, commands and decrees of Allaah سبحانه و تعالى that are unchanging and apply to all peoples and times, such as the Sunnah to destroy those beforehand when they persistently refused to adhere to the revelations that Allaah سبحانه و تعالى sent.
A common usage that stretches across the different disciplines is the use of the word Sunnah in juxtaposition to the Qur'an. In other words, one speaks about "the Qur'an and Sunnah," or "the Book of Allaah and the Sunnah of the Messenger of Allaah صلى الله عليه وسلم." In this sense, it refers to the guidance received via the Prophet صلى الله عليه وسلم other than what he conveyed from the Qur'an. 
 The different usages of the term "sunnah" are discussed in a number of works, including: Mustafa as-Sibaa'ee, as-Sunnah wa Makaanatuhaa fi at-Tashree al-Islaami (Beirut: al-Maktab al-Islaami, 1982), pp 47-49; Muhammad Luqmaan as-Salafi, as-Sunnah: Hujiyyatuhaa wa Makaanatuhaa fil-Islaam wa al-Radd ala Munkireehaa (Madinah: Maktabah al-Imaan, 1989), pp 11-18; al-Husayn Shawaat, Hujiyyat as-Sunnah (Falls Church, VA: American Open University, n.d.), pp 14-25
 E. W. Lane, Arbaic-English Lexicon (Cambridge, England: Islamic Texts Society, 1984), vol. 1, p. 1438. The word "sunnah" has other lexical meanings that shall not be discussed here. As Shawaat notes, all of the other meanings have some integral relationship with the term as defined above. Cf, Lane, vol. 1, p. 1438; Shawaat, p. 17
 Note that this particular hadeeth could be understood to imply that there is such a thing as "good innovations." From the Sharee'ah point of view, all innovations and herisies are definitely acts taking one away from the straight path. The action that the Prophet صلى الله عليه وسلم was referring to in this particular hadeeth is an action sanctioned by the Sharee'ah and followed by others - (in this case,) the action of giving charity. This deed is not considered an innovation because it is directly based on explicit evidences of the Qur'an and Sunnah
 The Authority And Importance Of The Sunnah