Adobe's activation servers keep track on how many active activations a serial number has; so both need an internet connection.
Suspend Activation Deactivates the software but won't lose your serial number. It is useful if you want to temporarily use a copy of your license on an another machine. (Note that you could use the 30-day trial option too, if you need the software only for a short period of time and haven't used the trial period yet — but this isn't your case.) You could later rather easily reactivate the software again.
Deactive Permanently Deactivates the software and deletes the serial number from your disk. It is useful if you're planning to
If you wish to reactivate the software later on that computer, you'd have to enter the serial number again.
*) I don't know for sure if permanent deactivation is required prior to CS5 reinstallation on the same machine, but that's what I would do just in case.
In your situation, permanent deactivation is the way to go.