Unit Testing Unit testing is testing directly at the most granular level. If given a method that takes two values and return a positive result. Does the method fails (crashes, throws an exeption, etc) if either of the values is null or invalid? Does it return valid results given a specific set of values? Does it fails if given an incorrect set of values?
Component Level Testing Similar to unit testing but with a higher level of integration. The big difference here is that the testing is done in the context of the application instead of just directly testing the method in question. Take the same example as the method above, say that the method is invoked through a keyboard shortcut after your application opened a document and after it executes something is displayed on the application. While testing at the component level you would have the application open and the document displayed but you would be testing the method and evaluating its result (without taking into account the shortcut or what gets displayed on the application afterwards). For the most part this is the kind of testing we do when there are test hooks inside your product code.
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