There is a switch on the rear of the receiver that permits the gun to be fired either: semi-auto; full-auto; or three round burst. AC stands for Automatic Carbine and "556" represents the caliber of the round it fires. 5.56mm. The 5.56 round is a military cartridge, loaded hotter than .223 and has slightly different dimensions than .223. You can fire either 5.56 or .223 out of the AC556, although it's designed to cycle with 5.56.
The US military has never adopted the AC556. Bermuda is rumored to be the only military that has purchased AC556's for military purposes. Police departments and prisons have made major purchases of the AC556 in the past, but have switched to the M16 as it has become more mainstream and reliable.
Depending on where they live, US civillians can purcase and own the AC556. It requires that the buyer make application on a BATFE Form 4, undergo an FBI background check and obtain a CLEO sign-off before the machinegun can be transfered to the buyer. A Class III firearms dealer must facilitate the transfer. A $200 transfer tax, must be paid and tax stamp issued to the buyer by the Treasury for the machinegun to be registered to a new owner. There is no "license" for owning a machinegun. Only someone who already has a Federal Firearms License (gun dealer) can apply for and receive a Class III license (let them deal in machineguns and other NFA items)