Compiling a C file in AVR Studio is straightforward, but running it typically requires a connection to hardware via JTAG. To view output without hardware, users can utilize a serial connection with a terminal program, especially if using printf statements. For simple output, an alternative is to connect an LED to a microcontroller pin and toggle it in the code. If hardware setup is inconvenient, consider using other compilers like GCC, Visual C++, or XCode for simpler programming tasks. Understanding the need for hardware is essential for running compiled AVR programs effectively.