Componant Vs. VGA?

Use the one that looks better to your eyes - probably component. Are you sure that's not an HDMI cable?

There is no HDMI cable available for the 360 yet, just component and VGA.

I think you need to use the VGA connection to get 1080p output from the x-box. You can check your owners manual or this this thread here.
http://www.avsforum.com/avs-vb/showthread.php?t=748751

VGA is the red, green, blue signals generated by a computer, or the direct output of a TV camera. While VGA is a component signal (separate RGB), component HD usually refers to analog YPbPr, where Y is the luma (B&W) portion of the signal, which appears green on screens, and PbPr are the blue-red components (encoded only at one-half the luma values). Pure RGB signals can provide the best fidelity, but VGA may be converted to YPbPr by some displays to permit color, tint, etc. adjustments. YCbCr is the digital component version, and sometimes analog component outputs are mistakenly labeled YCbCr. -- John

I tried out VGA with my Sammy ln-t4066f and it was a bit sharper when I switched the resolution to 1080p in the 360 blades menu but the color was never even close to what I could get it with component. Too dark and washed out with VGA no matter how much I tweaked. 1080p + component was a bit blurry imo so until I upgrade to an elite, 720p or 1080i + component offers the best pic.