Checking a delay routine is as simple as putting a break before the line of code that executes the delay routine and a break after the delay routine returns. The Stop Watch function can be used to do this. It's in the I/O view under processor. You run your program by hand or put a break point just before the call to the delay routine You right click on the stop watch value to reset it, or change the modulus. The you run your code to the next break point which should be immediately after the delay loop and look a the stop watch value.

You should try the help files before you post in the forums as all the information both you and I have described is easily found in them. IAR is a commercial C compiler. AVRStudio is the free software provided by Atmel and is based on it's own internal compiler which is ASM, though it can be used with external C compilers (such as the AVR-GCC free C toolchain that is available) I'm highly reticent to recommend pay software for a hobbyist that is using AVR's because the amount of free software out there is sufficient for anyone willing to ask or look into it a bit.