I have the same player with the X1 projector. Your component hookup is fine. No need to go DVI with this player unless you need to free up the component output of the player for another use.
White crush has been fixed by a firmware upgrade which you can get by going to KeohiHDTV website. Michael TLV is the person who's all over this. You can also do a search in the DVD forum here. White crush essentially makes the whites far too bright at the upper end of the white spectrum and the 90th to 100th percentile on the IRE window of test disc's are indistinguishable.
Do I understand completely what I just said. Hell no!
But those are the facts anyway. You won't need to acquire this firmware fix unless you plan to utilize the DVI function.
On the other hand, you could try the DVI and see whether you notice anything wrong with the picture. You may not.
Enjoy your new toy!