Sorry if this has been covered elsewhere, but is it possible to only create an mxml component using Catalyst and not an entire Flex Project (fxp)? There are areas where I would like to use this tool to simply creation of components, but also I might like to write the main app in Flash Builder and just wondering if this is possible?
Yes, it's definitely possible, though it's not immediately obvious. There's another thread on this subject here:
One trick that came up was that you can take the entire contents of your project in Catalyst and convert it to a custom component--that simply moves all the content into a separate non-application MXML component file, which you can then import into Builder and use in your Builder project.