I am not clear on what a molecule is. If water is a molecule, is it also a compound because the hydrogen and oxygen have been chemically combined? If so, how do you determine whether a substance is a compound or a molecule?
Whether something is a molecule or not depends on the type of bond that is formed when its atoms join together. In general, electrons can be shared between atoms (a molecular bond) or electrons can be completely removed from one atom and given to another (an ionic bond). Molecules have molecular bonds.
Whether something is a compound or not depends on how many different kinds of elements make it up. Compounds contain two or more different elements.
Water is a molecule because it contains molecular bonds. Water is also a compound because it is made from more than one kind of element (oxygen and hydrogen). If you like, you can say that water is a molecular compound.
Something like table salt (NaCl) is a compound because it is made from more than one kind of element (sodium and chlorine), but it is not a molecule because the bond that holds NaCl together is an ionic bond. If you like, you can say that sodium chloride is an ionic compound.
Oxygen in the atmosphere is a molecule because it contains molecular bonds. It is not a compound because it is made from atoms of only one element - oxygen. This type of molecule is called a diatomic molecule, a molecule made from two atoms of the same type.
Steve Gagnon, Science Education Specialist (Other answers by Steve Gagnon)