It's important to note that this is not a decomposition of V as a representation of SU(2) , only as a representation of T . In particular, if you act with a non-diagonal matrix in SU(2) then it will mix up these subspaces Vi .
Weight space decomposition
Weight spaces
We now embark on our study of the fine structure of SU(2) representations, aiming towards the classification theorem for irreducible representations that we stated earlier.
The first key observation is that SU(2) contains a subgroup T isomorphic to U(1) : T={(eiθ00e-iθ):eiθ∈U(1)}.
If I have a complex representation R:SU(2)→GL(V) then I can restrict it to T and I get a representation R|T:T→GL(V) . By the classification of irreps of U(1) , we find that V=V1⊕⋯⊕Vn where n=dimV and, with respect to this splitting, R(eiθ00e-iθ) is the diagonal matrix (eim1θ0⋱0eimnθ) . The m1,…,mn are integers called the weights, the Vi are called weight spaces, and the direct sum is called the weight space decomposition.
Example
Take the standard representation R:SU(2)→GL(2,𝐂) . We have R(eiθ00e-iθ)=(eiθ00e-iθ) . This is already diagonal. The weight spaces are spanned by the vectors (1,0) and (0,1) and the weights are 1 and -1 respectively.
We will depict the weight space decomposition as follows (the weight diagram). Consider the integer points sitting on the number line. Colour in each integer m which appears as a weight, and label it by the number of Vi having weight m if this number is strictly bigger than 1. In the example above, the weight diagram is a blob at -1 and a blob at 1 .

Consider the representation R:SU(2)→GL(𝔰𝔲(2)⊗𝐂) , R(g)Mv=gMvg-1 . We computed the associated Lie algebra homomorphism R*:𝔰𝔲(2)→𝔤𝔩(3,𝐂) . We found that R*(ixy+iz-y+iz-ix)=(0-2z2y2z0-2x-2y2x0). Since we're interested in the diagonal subgroup T we can set y=z=0 . We're interested in R(exp(ix00-ix))=exp(R*(ix00-ix)) which gives exp(00000-2x02x0)=(1000cos2x-sin2x0sin2xcos2x). The weights are going to be -2,0,2 . This is because:
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We calculated the weights of the representation U(1)→GL(2,𝐂) , eiθ↦(cosθ-sinθsinθcosθ) : these were ±1 because with respect to a basis of eigenvectors this matrix diagonalised and became (eiθ00e-iθ) .
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We're looking at the same submatrix but with 2θ everywhere instead of θ , so this submatrix can be diagonalised to give (ei2θ00e-i2θ) .
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What's left is the top-left entry which is 1=ei0θ , so we also get a weight space with weight 0.
The weight diagram is therefore:

Take Sym2(𝐂2) . If e1 and e2 form the standard basis for the standard representation then this has basis e21 , e1e2 , e22 . Since (eiθ00e-iθ) acts as e1↦eiθe1 and e2↦e-iθe2 in the standard representation, Sym2(eiθ00e-iθ) acts as e21↦ei2θe21,e1e2↦e1e2,e22↦e-i2θe22 (each factor transforms under the standard representation and then you multiply them together and the factors of eiθ or e-iθ either combine or cancel).
The weight spaces are therefore:
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V1=𝐂⋅e21 , with weight 2 ,
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V2=𝐂⋅e1e2 , with weight 0 ,
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V3=𝐂⋅e22 , with weight -2 .
The weight diagram is therefore the same as the weight diagram for the previous example:

We'll see later that this is enough to tell us that these representations are isomorphic.
Pre-class exercise
Figure out the weight diagram for Symn(𝐂2) .