by 
The Curious Bag
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<h4 class="dechead">On One Hand: HDMI Supports Audio and Video
Using an HDMI cable simplifies connections since it carries both audio and video in one cable. HDMI also supports all video resolutions up to 1080p. HDMI is a digital signal, so if you use an HDMI cable you won't lose any picture information converting back and forth from digital to analog.
On the Other: Component Video Can Carry HD Signals
Component video cables are capable of carrying high definition signals. They are also cheaper than HDMI cables. S-video and composite cables can't carry high definition signals. Regular DVD players, unless they are marked as "up-converting" don't have a high definition output.
Bottom Line
If you aren't watching anything in high definition you don't need an HD cable. If you are watching something in high definition then an HD cable is necessary to get the full effect. You don't need an HDMI cable, but you will get better picture quality if you use one.
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