480p is not HD on any size TV.
It's SDTV, or, to be technical, EDTV, or "enhanced definition."
Basically the middle ground between SDTV and HDTV.
And yes, the component cable is worth it. You'll see a big difference in some games. Namely Mario Galaxy, Brawl, and, as I've noticed, Resident Evil 4.
However, I've found that Prince of Persia and NFS Carbon still look pretty "composite-y."
And of course, if you don't own an HDTV, don't bother with the component cable, because only HDTVs support progressive scan.