1. A static variable inside a function keeps its value between invocations.
  2. A static global variable or a function is “seen” only in the file it’s declared in

(1) is the more foreign topic if you’re a newbie, so here’s an example:

#include <stdio.h>

void foo()
{
    int a = 10;
    static int sa = 10;

    a += 5;
    sa += 5;

    printf("a = %d, sa = %d\n", a, sa);
}


int main()
{
    int i;

    for (i = 0; i < 10; ++i)
        foo();
}

This prints:

a = 15, sa = 15
a = 15, sa = 20
a = 15, sa = 25
a = 15, sa = 30
a = 15, sa = 35
a = 15, sa = 40
a = 15, sa = 45
a = 15, sa = 50
a = 15, sa = 55
a = 15, sa = 60

This is useful for cases where a function needs to keep some state between invocations, and you don’t want to use global variables. Beware, however, this feature should be used very sparingly – it makes your code not thread-safe and harder to understand.

(2) Is used widely as an “access control” feature. If you have a .c file implementing some functionality, it usually exposes only a few “public” functions to users. The rest of its functions should be made static, so that the user won’t be able to access them. This is encapsulation, a good practice.

Quoting Wikipedia:

In the C programming language, static
is used with global variables and
functions to set their scope to the
containing file. In local variables,
static is used to store the variable
in the statically allocated memory
instead of the automatically allocated
memory. While the language does not
dictate the implementation of either
type of memory, statically allocated
memory is typically reserved in data
segment of the program at compile
time, while the automatically
allocated memory is normally
implemented as a transient call stack.

And to answer your second question, it’s not like in C#.

In C++, however, static is also used to define class attributes (shared between all objects of the same class) and methods. In C there are no classes, so this feature is irrelevant.