A little short on time to edit this well. Bascially it has instructions for how to create one or several "targets", and what each target depends on. In turn there may be instructions where that dependency is the "target" telling how to construct the dependency. Most targets and dependencies are files, and the ultimate goal is usually to create one or a few executable, or something like one (in this case hex files). Each instruction set is just a set of standard windows command-line commands, but the most featured command is usually the compiler command, or sometimes the linker (used to combine several compiled files into an exectuable).
There is much nice variable manipulation, and this makefile has lists of all firmware compatible with each attiny and builds hexes for each firmware for each attiny equal or greater to that. It also builds battcheck variations of each build.
The Makefile is capable of sending #define configs to the compiler and they override the configs in the source code. This is how the battcheck builds are made. It overrides the VOLTAGE_CAL (I think that's it) option and otherwise remakes the same configuration.
It also makes the preprocessor files, which shows what the C code looks like after all the configurations are applied and the #if's are worked out, a simplified version of the final code for each configuration (but may be hard for novices to understand some of the expanded macros in that format).
It also finally checks the sizes of all the files built and creates a summary.
It's last trick is it knows how to pack the results up into a zip for me to post, but you have to run it with a different command "make packit".
Generally you can tell a makefile what target you want it to make. The default is "all" and all is defined as some list of other targets.
In Atmel studio under build you just tell it use the makefile and uses that instead of its own rules for compiling. Oh, since the Makefile has pretty good compiler options in it I think, it will likely beat your Atmel defaults by a little.
Oh yes, the very last trick is this Makefile should work without Atmel Studio (I'm pretty sure), if you install WinAVR, just by double clicking the included bat file. Actually you can use the double click method with AS instaleed and without WinAVR installed, but you need to modify the bat file and remove the WinAVR related options. Hmm, I should probably include two bat files.