A control is a reusable class that derives from the System.Windows.Forms.Control base implementation (either directly or indirectly) and whose main purpose in life is to interact with users on behalf of a container, which can be either a form or a container control.1 [1] A control's user interaction takes two forms: acceptance of user input via mice and keyboards, and presentation of processing results and state as UI output. 
Components, it is possible to create specialized classes, known as components, which can be hosted on a form's nonvisual design surface.
Components can be configured using Windows Forms Designer features such as the Properties window and generally make lighter work for developers. What components don't do, however, is provide a UI that's painted directly to a region on a container, such as a form or panel, which they are directly responsible for. Also, components cannot directly process user input. The weapon of choice in these situations is the control.

A component is a class that implements the IComponent interface, located in the System.ComponentModel namespace. Any class that implements IComponent can be integrated with a componenthosting environment, such as VS2005.
Essentially, components are reusable, configurable classes. Consequently, they do not provide native support for user interaction via a form, such as by exposing a UI that's hosted by a form or handling keyboard and mouse input. Intrinsic support for UI interaction is provided by controls.. This distinction is further reinforced by the location where components are hosted on a form, specifically in an area known as the nonvisual design surface, or component tray.
Two kinds of components do expose UIs in special situations. First, there are components like ErrorProvider and Tool tip that show their UIs infrequently enough that it doesn't make sense for them to be hosted on a form next to other controls that are usually visible all the time. Second, the behavior of components like OpenFileDialog and SaveFileDialog requires the creation of an entirely new window. However, the UIs presented by these components do not come under the purview of the host form.
Either way, all components reside on the nonvisual design surface. 
 ( Windows Forms 2.0 Programming By Chris Sells, Michael Weinhardt )

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