Firstly as you have stated its a 480p projector so its native resolution is only 480p so no matter what signal you feed it be it 576p (pal dvd) or HD 720 or 1080 the projector will have to rescale it to 480p
This means that while you may be able to feed it an HD source it will never display it in its full resolution. That said its a very good pj and well worth the money so its a good choice providing you are not expecting to view HD images in their native form.
Do you have a screen or are you projecting onto a wall?
Cables be it hi fi or otherwise seem to divide opinion more than anything else, if you notice a difference fine, if not don't bother spending loads of cash