Generally an amp does not do any decoding or processing - e.g. they don't have Dolby Digital or DTS decoding built in. A receiver does.
So with an amp you would need a seperate processor or a source with a decoder built in.
Traditionally, before AV, a receiver was just an amp with a built in radio.
Just to tidy this up a little altho in essence it is correct....
Integrated Stereo Amplifier = Source switching and two channel amplification in one box
Integrated Stereo Receiver = Source switching, two channel amplification and radio tuner (normally analogue but probably by now some DAB)
Hifi Pre-Amp = Source switching only
Hifi Power Amp = Amplification only, can be single channel (Monobloc) or two channel (stereo)
AV Integrated Amp = Source switching, audio decoding, audio amplification and in more recent times video switching and conversion plus sometimes scaling
AV Integrated Receiver = Same as AV Integrated Amp but with radio tuner built in as well (again normally lanalogue, but recently one or two i believe have DAB)
AV Processor = Source switching, audio decoding (possibly encoding too on some expensive models) and sometimes video abilities too
AV Power Amp= Purely amplification, normally either single channel, two channel, three channel, five channel or seven channel. Not usually any difference over Hifi Power Amps apart from some having more channels
As for the component input question, some people like to run everything to the receiver/amp for easier switching purposes and having only one cable going from receiver/amp to their chosen Display (TV, Projector etc)
Normally it will do nothing at worst, although its possible some models might not have implemented their video abilities very well and could degrade the signal, in other cases some can apply scaling etc which could improve the signal, it usually depends on what other equipment you have in the system and a few other factors.