Wow - so many wrong answers.
As long as the Component cables are rated for the high-def frequencies, they will send full 1080p to your TV and with a name-brand TV you should not be able to see any difference between this and a HDMI feed.
The problems come in because:
- With component - the TV has to convert the signal to digital. Off brands do not do this very well and people see artifacts because of the poor AtoD circuts in the TV.
- Sony has decided on it's BluRay players to NOT output 1080p on the component jacks - and PS3 fanboys now claim the cable cannot handle it. Un-true, but ever try to argue with a fanboy?
- People buy a standard def $25 cable from Radio Shack, use it for HD frequencies and when they finally change to HDMI - they notice a bit more detail and focus that was lost by using the wrong component cable.
- People forget that some TV's have separate brightness/contrast/color per input. They hook up a HDMI cable to replace the component cable, see the 100% brightness and 100% contrast set at the factory and scream at how much better the TV looks with HDMI. High brightness and contrast IS eye-catching, and is perceived as 'better'. But anyone who has spent time calibrating their display knows differently.
While I am defending component - HDMI is the preferred way to hook things up. It's cheaper, it's digital, it simplifies audio and video connections. But do it for the right reasons, not because of the myths.