Originally Posted by ElMikeTheMike
On a 720p set there will be no difference between component and HDMI, aside from one single wire vs. one larger wire with multiple ends. On a 1080p set, you need HDMI for bluray movies to play back at 1080p due to HDCP.
You can do 1080p over component (outside of bluray and other protected media), but it's up to the TV; not all support that resolution through that connection.
The difference between 1080p and 720p can be difficult to tell. It depends on the size of the screen, how close you sit to it and what you're viewing.
Depends on the TV, component is an analog signal so running to an LCD TV you'd have 2 signal conversions of the image, D/A coming off your source and then A/D at the TV.
Where as HDMI is digital (and electrically the same as DVI only using a different connector and adding an audio stream to the connection) and as such you'd avoid all signal conversions from source to T.V. thus providing the highest quality image on your set.
Now like I said this would only go for Digital displays, i.e. DLP, LCD, Plasma, Laser, LCOS, and OLE. Anaglog displays using CRT technology would see no difference between Component/HDMI.