This feature was introduced in VHDL1993. It is great because the compiler will compare the mapping directly to the entity, rather than the compiler checking the component (which matches) then the elaborator checking the component to the entity and it cant find a match (and this is 20 minutes after you pressed compile!)
This is called direct instantiation, and I would highly recommend it. It also allows you to select which architecture to use if there are several:
One thing to watch out for with direct instantiation is that the component must be compiled before it is used.
With the old style, the compile order for the source files doesn't matter.