A COM component is commonly referred to as a COM Object. We can visualize a COM component or Object as simply a "black box" that comprises a set of methods and associated data. Internally, these Objects contain reusable code (Methods), and provide ways for an application to call the object's Methods and read/write its associated data through its Interfaces. Notice that this is the same definition as an object internal to your program. The difference is that COM offers a way to perform this functionality on an object external to your program.
A COM Component is generally known as a COM SERVER, because it serves up information or actions requested by a COM CLIENT. A COM SERVER makes its Methods and Properties public, so that a COM CLIENT can call them as needed.
COM Components usually take the form of an EXE, or DLL/OCX file, but the actual file extension is largely irrelevant. However, DLL/OCX versions of a component are generally referred to as "in-process", since they are loaded into the address space of the calling application. EXE-versions are typically "out-of-process" because they will not share the address space of the calling application.
To summarize, a COM Object (COM Server) is a special form of code library (similar to a standard DLL) that conforms to the COM specification. It provides at least one public interface, and is identified by a globally unique PROGID and CLSID.
Every class is associated with a GUID (a 128-bit number or string) which uniquely identifies this particular class from all others, anywhere in the world. This identifier is called the Class ID, or CLSID. A friendlier version of the CLSID is a shorter text name, which also identifies the Class. This text name is known as the PROGID, though it's possible this PROGID may not be totally unique. As it's a simpler construct, it might be duplicated in another program. These identifiers are stored in the Windows Registry when the COM component is installed and registered. PowerBASIC programmers reference COM components by their PROGID string, and rarely by their CLSID. However, since these two items are stored in pairs, it is straightforward to retrieve the matching PROGID for a known CLSID, and vice versa.
As mentioned earlier, you don't need to know how a television works internally to use it and benefit from it. Likewise, you don't need to know how a COM Object works internally to use it and benefit from it. You only need to know the intended job of the object, and how to communicate with it from the outside. The internal workings are well "hidden", which is called encapsulation. Since we aren't able to "look inside" a COM Object, it's not possible to directly manipulate internal variables or memory. This provides a increased level of security for the internal code and data.
What is an object, anyway?
Just what is COM?
How do you publish an object?
How are GUID's used with objects?