Martin Flower Says:
I use component to mean a glob of software that's intended to be used, without change, by application that is out of the control of the writers of the component. By 'without change' I mean that the using application doesn't change the source code of the components, although they may alter the component's behavior by extending it in ways allowed by the component writers.
A service is similar to a component in that it's used by foreign applications. The main difference is that I expect a component to be used locally (think jar file, assembly, dll, or a source import). A service will be used remotely through some remote interface, either synchronous or asynchronous (eg web service, messaging system, RPC, or socket.)
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