Just to expand slightly the current HD DVD players and discs will output high def (720p or 1080i) via the component output. Future releases may put an end to this by using a software flags on a disc by disc basis that forces the player to down-convert to better-than-standard-def pictures. At present there seems no enthusiasm to do this from the studios which is surprising but very welcome. I also understand that there are legal issues with forcing down-converting in Japan (and maybe the US as well) - however others will need to confirm this.
Regardless for now the players and discs support full high resolution output via component which is excellent news for early adopters. Hopefully by the time the situation changes everyone will have a HDMI equipped high def screen.