The correct statement goes something like this:
The function
$$
f(x)=\left\{
\begin{array}{c}
x^2\sin(\frac{1}{x}), \ \ x\neq 0 \\
0, \ \ x=0
\end{array}
\right.
$$
is differentiable everywhere and (thus) continuous everywhere.
Its derivative (use product + chain rule of differentiation for $x\neq 0$ and apply the definition of the derivative at $x=0$) is:
$$
f'(x)=\left\{
\begin{array}{c}
2x \sin(\frac{1}{x})-\cos(\frac{1}{x}), \ \ x\neq 0 \\
0, \ \ x=0
\end{array}
\right.
$$
which is discontinuous at $x=0$. (the limit of the upper branch for $x\rightarrow 0$ does not exist).
P.S.: Here is a quick argument to show why $$\lim_{x\rightarrow 0}f'(x)=\lim_{x\rightarrow 0}\big(2x \sin(\frac{1}{x})-\cos(\frac{1}{x})\big)$$ does not exist: Let us suppose that the limit exists and is a real number $l$:
$$\lim_{x\rightarrow 0}f'(x)=\lim_{x\rightarrow 0}\big(2x \sin(\frac{1}{x})-\cos(\frac{1}{x})\big)=l\in\mathbb{R}$$
Thus:
$$
\cos(\frac{1}{x})=2x \sin(\frac{1}{x})-f'(x), \ \ \ \ x\neq 0
$$
and since $\lim_{x\rightarrow 0}x \sin(\frac{1}{x}\big)=0$ (remember that: $0\times bounded = 0$), after taking limits at $x\rightarrow 0$ of both sides of the last equation we arrive at:
$$
\lim_{x\rightarrow 0}\cos(\frac{1}{x})=-l\in\mathbb{R}
$$
which is clearly absurd, since it is well known (and almost evident) that the $\lim_{x\rightarrow 0}\cos(\frac{1}{x})$ does not exist.