The jaggies you folks are noticing on your PS2 is probably due to the PS2's inherently low resolution for most games. I can assure you that you won't notice these problems on a Gamecube or an Xbox when using the component cables. As someone posted earlier, there is a certain dependence on the fuzziness of Standard Def televisions to hide the obvious stair stepping effect of the PS2's low resolution display mode. You can definitely blame this on the source and not the display.
For what it's worth (and on another subject), I picked up the Harman Kardon DPR 1001 Receiver from Circuit City yesterday ($299). The first store I visited was sold out, and they called another store about 10 miles away that had one left. Lucky me! Anyway, I'm pleased to report that nearly ALL my problems with the Xbox / Gamecube distortion problems disappeared. I hooked up my Xbox and Gamecube straight to the receiver (two component INs on the receiver), and the receiver is going component out to the television (30" widescreen Sanyo). The problems I had previously pretty much disappeared.
1) Xbox when playing DVDs has green vertical bars -- GONE
2) Xbox & Gamecube when playing games in Progressive Scan has horizontal lines of distortion across the entire width of the screen -- GONE
This was serendipitous, to be quite honest, and now I have NO regrets about this TV. None, absolutely none. I am now convinced that there has to be some kind of weirdness between those game consoles and the TV when they go straight into it. Although my receiver is certainly not high-end, it probably has some kind of circuitry that's cleaning up my video from the source to the display. I admit I don't know much about how this kind of stuff works, but it is the only thing sorta makes sense to me.