C^1 functions are functions which have continuous first order partial derivatives; and C^2 functions have continuous second order partial derivatives. For example, you can differentiate f(x) = \sin(x) as many times as you like and it will remain a continuous function for all values of x. So we say that \sin(x) \in C^{\infty}, that is, \sin(x) is a member of the infinitely differentiable continuous functions.
This kind of notation is similar to saying that \textbf{x} = (x,y) \in \mathbb{R}^2 which says that the vector \textbf{x} is a vector in a 2 dimensional vector space.
To prove that a function is differentiable is somewhat different that it is to prove that it is continuous. All you need to do to prove that a function is continuous at some point is to show
\lim_{x\rightarrow x_0} f(x)
exists and equals f(x_0). Often proving that a limit exists can be an easy task. However, if you tried to prove that a function is differentiable, then you'd have to prove that
\lim_{h\rightarrow 0}\frac{f(a+h)-f(a)}{h}
exists. Further, sometimes we already know that a function is continuous. When this happens we say that a function is continuous by inspection. This generally occurs when we want to prove that say f(x) = x is continuous - the continuity of this function is widely accepted and the proof may be omitted. However, you can't generally say that f(x) = \sin(1/x) is continuous by inspection over the interval [-1,1] because this is (1) not continuous at 0, and (2) the function isn't "general" enough to say that you can by inspection.
When you say that the partial derivatives are continuous, it generally means for the entire domain of the function - you are right. For instance,
\frac{\partial}{\partial x}\sin x
is continuous on its domain. To be specific, its domain is the real line: -\infty < x < \infty or the interval (-\infty,\infty). But if a function has continuous partial derivatives, then it must be continuous at every point on its domain.
Sometimes, you can get special restrictions such as "continuous everywhere except for at finitely many points". These sorts of functions are called piecewise continuous. Which form a special subset of continuous functions, and can be included in theories such as Fourier Theorem, which includes continuous functions and piecewise continuous functions.