Is a sacrificed unit considered a destroyed Unit?
No, they are different, so something triggered from "when this unit is destroyed" doesn't trigger from the unit being sacced.
Anybody got a smart way to use this card for the high elves? it deals two damage to capital every turn, which I assume means your zones and not units... I am looking at a pure high elves deck....
If by pure you mean only HElf cards, no neutrals, then I think you're SOL, but splashing in with neutrals, 2x Contested Fortress nicely counters the 2dmg from ToV.
What does it mean by combat damage? Does it mean any damage that doesn't have a key word like indirect/uncancelable damage? Or is it only for damage during battle field phase?
Combat damage is dealt by units either attacking or defending, nothing else. It doesn't include anything an attacking unit deals through its own Action (or other card effect), combat damage is just the damage you deal from adding up the hammers on the units and distributing it (although some units may deal additional combat damage from their abilities).