"That sucks" (not "that's sucks"). We use it when something is inadequate or even worthless. If a film sucks it simply means that it is a bad movie; when party sucks, it's not a good party, and so on.
Or if you comment on something using this phrase, you're stating that you don't like it. Like here:
"Apples instead of ice-cream? Well, that sucks!"
Since it's a slang term you might not want to use it in formal conversation or writing but I think it's OK to use it when chatting with friends, etc.