Some of you are half right - component cables CAN do 1080p, but on the Xbox 360, it is NOT ALLOWED. The same goes for most HD DVD players and even most televisions won't accept 1080p through component. I believe the reason for this stems from copyright protection laws, but I'm not exactly sure.
In any case, you CANNOT get 1080p picture with your component cables using your old Xbox. Sorry, but you can't. Personally, I can barely tell the difference between 1080p and 1080i, so spending $100-$200 bucks for that sole reason doesn't sound appealing to me. If you're a video enthusiast, though, and MUST HAVE the best possible picture, then go for it. Keep in mind, however, that only a select few games really have true 1080p picture (Bioshock, COD 4) and most will only do 1080i anyway. I say, if your TV is a high quality HDTV, 1080i will still look stunning, so no need to spend all that money for just a little bit of polish.
Oh yeah, if you're THAT hard up for cheap 1080p picture you CAN get 1080p with your old Xbox using a VGA cable, or a VGA to HDMI converter. However, be wary - VGA is known to shift color hues so it's possible (actually, quite likely) that your color phase will be a bit off. Not a huge deal, but I consider myself a videophile and I'm quite happy with my 1080i.
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