C# - What is a component and how is it typically used?

Question

What is a component class and where would I typically use one?

When I add a new item to my project in VS.NET 2008 one of the options is to add a component. I am not

Answer 1

If you mean a class that inherits from System.ComponentModel.Component, like for example the System.Windows.Forms.BindingSource and strongly-typed DataSets, this will allow to drag an instance on the Visual Studio design surface (on a form in design-time) and set some properties using the property grid.

Once there is an instance of such component on the form it is discoverable by other components/controls. For example a BindingSource can be selected as a data source for a grid view or some other control.