setuid program are programs, which runs as owner of the program, rather than the user executing the program.
root@laptop:~# ls -l `which su`
-rwsr-xr-x 1 root root 31012 2009-04-04 11:19 /bin/su
root@laptop:~# ls -l `which sudo`
-rwsr-xr-x 1 root root 115136 2009-02-17 08:52 /usr/bin/sudo
root@laptop:~#
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