Integration Services uses transformations to manipulate data during an ETL dataflow. Transformations can be used in [[articles:SSIS Dataflow Task|Data Flow Tasks]], between data source and destination components, or other transformations.

ETL developers sometimes face requirements which cannot be solved with the built-in transformations. The Script Component transformation, as it can host custom VB.NET or C#.NET code, can be used in each of these cases. Just for an example, assigning row numbers in the order of the input cannot be solved with any other transformation component.
Usually it's more comfortable to solve tasks with other transformations, but any of them can be replaced with a Script Component.

The Script Component is a special transformation component since it can act as a data source, or a destination component as well.

If the Script Component is used as a data source, then it supports multiple outputs. If used as a destination, then it support an input.
As a transformation, Script component supports only one input and multiple outputs.

In terms of buffer usage, buffer blocking only depends on the Script Component's code.

For more detailed information on this transformation, please refer to this MSDN article.
For the complete list of SSIS transformations, check this Wiki article.