I got the elite and am using the provided hdmi cable. It looks great. The elite does come with component as well. I haven't tried it. Here is a photo of my three tv game room. Two elites and an old xbox.
That's likely and thanks to the fact that your XBOX 360 can now upconvert your DVD's for improved picture quality which was only possible over a VGA connection prior to the Elite.
I used both the component and the VGA before, it wasn't the resolution that was the problem, there was tons of static in all my favorite movies, it is all but gone now. Most likely due to the fact that there is no more digital>analog>digital conversion going on anymore.