I noticed a quite considerable difference when I upgraded from component to HDMI (I swapped the body of my old 360 with my sons newer one that had an HDMI out on it, don't tell him he's only connecting via Scart anyway)
yep, thats what he means..component ain't too hot on some tv's, and thats one of them..i've also got that model tv, in my bedroom, and use it as a monitor/tv, and to be honest, the 360 with component comes out all overbloomed and cartoony, even after calibration, yet with hdmi its perfect, and weirdly, the pc is rubbish with hdmi/dvi-hdmi, yet far better with analogue vga..
its just how the displays handles different inputs, i'm afraid.
Mine's fine as a second monitor from my PC via HDMI, I use it for watching movies all the time, but I have to set it as my primary display otherwise it tears nastily, but that's running from a 128Mb GeForce 8400M from my laptop, should be fine from a decent gfx card.