The "Squadron Supreme" is a group of superheros, analogs of the old DC "Justice Society of America" from the 1940s. (The Squadron was introduced in Marvel comics The Avengers, so they could hardly use the real names or costumes of the originals.) Roy Thomas, then the writer on The Avengers had a fascination with the superheroes of the 1940s, the heroes of his youth, and frequently re-introduced old Marvel characters into the "modern" Marvel universe. He had previously used the Justice Society as the basis for a group of supervillains, The Squadron Sinister. The Batman doppleganger, Nighthawk, and several other characters appear in both groups, bad guys in one universe, heroes in another.
Apparently some of the Marvel and DC writers and editors got together in the late 60s or early 70s and decided to have some fun with each other's characters, without pissing off the corporate types by actually having them guest-star in competing books. (There were later several real cross-over stories between the two universes, beginning with a team-up between Superman and Spiderman.)
I don't know what happened with the DC end of the idea, because I wasn't following DC comics very much at the time (except for Jack Kirby's titles.) Anyway, the Avengers somehow met up with the Squadron because somebody opened a door into a parallel universe, where the Squadron was Earth's defenders. I don't remember the story very well. I think it was the usual superhero cross-over plot: Two heroes (or teams) meet up unexpectedly, each thinks the other is the bad guy, they fight to a draw, realize they've both been duped by a super-villain, join forces and then pummel him. /forums/images/graemlins/smile.gif I'm pretty sure their original appearance was a two-parter, the first story set on our Earth, the second on theirs. They came back for a couple of other guest appearances.
At some point there seems to have been a Squadron Supreme mini-series. This was a much darker and more adult story, as such minis have increasingly become over the years, and made some serious changes to the group and their backstory. I believe they have also made several other guest appearances in various Marvel books, including return engagements with the Avengers.
There is currently a great deal of speculation as to which "version" of the Squadron JMS wants to write, and how he's going to deal with the continuity issues.