'Madtown', everything I've ever read says yes, VGA is better (but not without issues, color balance being one, but seems to be sporadic and dependent on the monitor)...and the only way to get 1080P out of the 'old' systems. You can't get 1080P out over component. If you're 1080i...I'd probably do a test first, and you might find component more stable.
As for the PS3. You guys see the footage of the next-gen Ratchet and Clank? Trust me, when the PS3 has software like THAT, you're going to start seeing some serious movement of systems...
It's why I'm waiting. Until then, my 360 is doing me just fine.
As for the Elite--no thanks. If they'd built in the HD-DVD drive I might have batted an eye...but to still hang an external that they won't even build in matching black, crazy! And that 120GB drive--$180? I don't think so--I'll wait for the double markdown come Christmas.