Many posts in many forums do state that Component is better than VGA but when you read what they are saying it's that VGA is too bright and the colours are washed out. When you adjust the brightness the colour falls into line. Most problems to be had with Component are ringing (ghosting?).
PGR3 on my AE900 and AE300 is way too dark and has poor sharpness due to the ringing.
The LCD in the shop is smaller and that is why it looked really good it's like when you download a small trailer it looks good small but poorer the bigger it gets plus the 360 component doesn't look to good on a Panny projector.
Obviously this is just my opinion but I had the same issues you had with MS component leads (best component leads for 360) and VGA sorted them.
This forum below has loads of people talking about Component ringing and VGA too bright and poor colour.
http://forum.oxm.co.uk/viewforum.php...09e2c6bdacce1b