LLF, Are you sure of this? Per ATI's literature, it is only 1080i capable:
Multiple component video modes available for use.
The HDTV Component Video Adapter will support:
480i (interlaced)
480p (progressive)
720p
1080i
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ADU,
Most consumer grade HDTVs won't sync to 1080p... and they won't be able to downcovert such signal either. Typically they only accept a limited number of input signal formats: 1080i, 480i, 480p and, if you're lucky, 720p.
One can fool such HDTVs into displaying a 540p signal (which looks like a 1080i signal for the TV's perspective), which is why this resolution is commonly used.
As you indicated, these resolution limitations apply regardless of the type of connection (HD15, 3 or 5 RCA connectors, DVI, etc.) or coloring scheme (RGB or YPrPb)... so yes, on has to drop to a lower resolution over DVI as well