There are multiple ways to extend Joomla. Below, we describe the three primary methods.
Components
A component is in fact a seperate application. You can think of a component as something that has its own functionality, its own database tables and its own presentation. So if you install a component, you add an application to your website. Examples of components are a forum, a newsletter, a community system, a photo gallery, etc. You could think of all of these as being a seperate application. Everyone of these would make perfectly sense as a stand-alone system. A component will be shown in the main part of your website and only one component will be shown. A menu is then in fact nothing more then a switch between different components.
Modules
Modules are extensions which present certain pieces of information on your site. It’s a way of presenting information that is already present. This can add a new function to an application which was already part of your website. Think about latest article modules, login module, a menu, etc. Typically you’ll have a number of modules on each web page. The difference between a component and a module is not always very clear for everybody. A module doesn’t make sense as a standalone application, it will just present information or add a function to an existing application. Take a newsletter for instance. A newsletter is a component. You can have a website which is used as a newsletter only. That makes perfectly sense. Although a newsletter component probably will have a subscription page integrated, you might want to add a subscription module on a sidebar on every page of your website. You can put this subscribe module anywhere on your site.
Another commonly used module would be a search box you wish to be present throughout your site. This is a small piece of re-usable HTML that can be placed anywhere you like and in different locations on a template-by-template basis. This allows one site to have the module in the top left of their template, for instance, and another site to have it in the right side-bar.
Plugins
They used to be called mambots in Joomla 1.0.x, but since Joomla 1.5.x they’re called plugins. A plugin is a function which is performed on a part of Joomla before this part is shown. This part can be on content, on the editor, on the complete system, etc. One example would be a word replacement plugin. You could create a plugin that would scan every article for a specific word — we’ll say “bunny” — and replace it with a different word such as “rabbit” before the content gets displayed to the user. This is a very simple example and only hints at some of the power plugins can give you.
If the difference between the three types of extensions is still not completely clear, then it is advisable to go to the admin pages of your joomla installation and check the components menu, the module manager and the plugin manager. Joomla comes with a number of core components, modules and plugins. By checking what they’re doing, the difference between the three types of building blocks should become clear. You can also check out the official Joomla extensions page. Browse through the extension categories and you’ll be amazed about the extension possiblities you have for your site.