Great Tutorial from TronixStuff about the less known Arduino AREF Pin. First: what is resolution?

We measure resolution in the terms of the number of bits of resolution. For example, a 1-bit resolution would only allow two (two to the power of one) values – zero and one. A 2-bit resolution would allow four (two to the power of two) values – zero, one, two and three. If we tried to measure  a five volt range with a two-bit resolution, and the measured voltage was four volts, our ADC would return a value of 3 – as four volts falls between 3.75 and 5V.

What is AREF?

AREF means Analogue REFerence. It allows us to feed the Arduino a reference voltage from an external power supply. For example, if we want to measure voltages with a maximum range of 3.3V, we would feed a nice smooth 3.3V into the AREF pin – perhaps from a voltage regulator IC. Then the each step of the ADC would represent 3.22 millivolts.

Read on this well detailed tutorial via [TronixStuff]