[0] https://en.wikipedia.org/wiki/Lagrangian_point#Spacecraft_at...
[1] http://www.nesdis.noaa.gov/DSCOVR
[2] http://www.swpc.noaa.gov/products/aurora-30-minute-forecast
The sun-earth L1 lagrange point is between the sun and the earth (in every two-body gravitational system there are 5 lagrange points, so there are earth-moon lagrange points etc)
These points are interesting because the orbit behaviour of items in them is weird! Specifically, the gravitational effects of the two bodies involved work in tandem to produce interesting effects.
Any bodies positioned at the L1 lagrange point of a two-body system will stay in the same position relative to both the larger bodies. Normally, the closer you get to the thing you are orbiting the faster you orbit. If you are appropriately near another large body (like the earth) that second body "pulls" back on you [edit: as long as you are on the inside of it - if you're on the outside it pulls you forward, and you get the L2 point], causing your orbit to slow down. At L1, those forces are balanced, and the third, smaller body has the exact same orbital period as the second body.
That is, the satellite is always on a straight line drawn between the earth and the sun.
The main reason for it to be there is to measure the solar wind, an early detection system.
It also happens to be in a great position to take pictures of the sunlit side of the earth.
The mission is slated for 2 years, and they have fuel for 5. I also happen to know that they reached L1 faster than anticipated thanks to a really nice insertion from the SpaceX Falcon 9 launch vehicle.
This means that the operational life might be even longer, but I haven't found any sources for what that might be.
See [0] for more: https://en.wikipedia.org/wiki/Orbital_station-keeping