Someone I know recently bought a new plasma, 1080p etc. They do not have an A/V reciever capable of HDMI switching. so rather than buyng HDMI cables to run from a SAT box, and from a Blu-Ray player, they are leaning towards using component for Video and optical for audio to the A/V recv.

So my questions are
1. Can you ever get 1080p through component cables, and if not why? Are component cables even capable fo the video bandwidths needed for 1080p?
2. What are the advantages in the audio department of HDMI vs. Optical?
3. In general, will a normal 1080i or 720p signal look any better/worse over HDMI vs. component?

Thanks in advance.

1) Yes. For example, XBox 360 can output 1080p over component to a 1080p TV. I did this last weekend on my friend's new 1080p LCD. If you use cheap cables with crappy bandwidth, it is possible to get nasty reflections and ghosting, but anything of reasonable quality should be ok. With that said, just because it can be done does not mean that all sources or displays can do it, and both your source and your display will need to be able to in order for it to work.
2) HDMI Audio caries (at most) 8 channels of 96Khz/24bit uncompressed (PCM) audio. In theory, if content is mastered properly, this should provide the highest digital audio quality of any consumer standard out there today. SP/DIF (either optical or coax) can carry 1.5Mpbs of digital data which originally was enough for 2 channels of 48KHz/16bit PCM audio (CD/DAT audio rates). Later, they added the ability to carry compressed audio (AC3, DTS, etc) assuming that your receiver could process the codec. The fundamental bitrate is unchanged, however, so the codec stream cannot exceed 1.5 Mbps. In addition, in order to take advantage of HDMI audio, you will need a source that can drive HDMI audio (not all do/can) as well as a receiver which can take HDMI audio. After all that, you will need to wrestle with the fact that most of the content you will be getting for a good long time will still be encoded with AC3, DTS, WMAPro, or some other codec and not with raw PCM audio, so while you will have the capability of making use of that high end audio, you will not be using that ability for the majority of your content (although games which take advantage of it could sound great... Don't know any that do currently, however).
3) Better over HDMI. The effects will be particularly pronounced when using a digital display (as opposed to CRT) in the high horizontal frequencies. To really see the effect, get a test pattern generator which can output over either component or HDMI (the DVDO VP20/30/50 seires is good for this), and put on a test that consists of vertical bars all 1 pixel wide alternating between black and white (driving the system at its native resolution). Over HDMI, you will see a perfect on/off alternating pattern for each pixel of the display. Over component, because the display needs to recover the scan line in the analog domain, and the timing is not perfect, you will see all sort of low frequency beat patterns horizontally across the display. The frequency of the beats will be equal to the difference between the source's pixel clock and the display's pixel clock.

hope this helps.