If you're permanently not going to be using the old computer, I believe the proper choice would be to Permanently Deactivate that installation, but it really doesn't matter that much if no one tries to activate Photoshop again on that system.
Hover over the buttons to see the difference. The "Suspend" button just avoids wiping the serial number off the computer.
if I choose "suspend" and then my computer dies....do I lose one activation?
If I choose "permanently deactivate" but keep CS5 installed on my old computer, how would I reactivate CS5 on the old computer?
I believe you would not lose an activation, and that "Suspend" just keeps your serial number handy and puts it in the field by default in case you want to activate the installation again without typing it in again. In the latter case, you'd have to type it in again. I think the whole difference is a little convenience.