Components are larger extensions that produce the major content for your site. Each component has one or more "views" that control how content is displayed. In the Joomla administrator there are additional extensions such as Menus, Redirection, and the extension managers.
Content
The content component (com_content) is what you use to write articles. It is extremely flexible and has the largest number of built in views. Articles can be created and edited from the front end, making content the easiest component to use to create your site content.
Contacts
The contact component provides a way to provide contact forms and information for your site or to create a complex directory that can be used for many different purposes.
Search
Joomla! 2.5 offers two search options. The Basic Search component provides basic search functionality for the information contained in your core components.
News Feeds
News Feeds (com_newsfeeds) provides a way to organize and present news feeds from another site on your site.
Administrator Components
All components are also used in the administrator area of your website. These include the Media Manager, Extensions Manager, Menu Manager, and Global Configuration.
Media Manager
Lets you upload and insert images into content throughout your site.