A suspended chord is an added tone chord in which the third is replaced or accompanied by either a fourth or a major second, although the fourth is far more common.
This term suspended is borrowed from the contrapuntal technique of suspension, where a note from a previous chord is carried over to the next chord, and then resolved down to the third or tonic, suspending a note from the previous chord. However, in a suspended chord the added tone does not necessarily resolve.
Chords are also said to have a function in their diatonic scale, which relates to the expected resolution of each chord within a key.
When a chord progression resolves to a III or IV chord, it is called a Tonic Substitution, because the stable III or VI chord is being used as a substitute for the expected I chord.
The dominant seventh chord is useful to composers because of the fact that it is a major chord with a very strong sound, that also includes a tritone between the third and seventh of the chord.