I think AC maybe be confusing HD video formats with HD transmission formats.
Both Component and HDMI support high definition signals (and are completely independent of HD video formats such as HD-DVD and Bluray). If using Component, you will need a seperate audio connection also, whereas in HDMI the audio is transmitted in the same stream as the video signal. But pretty much all TVs that have component will have an audio jack right next to the video inputs.
Claims vary on the difference in picture quality that people say they can see between the two standards, but it is generally accepted that any difference to you will be more noticeable when playing video games. But probably not enough for you to lose any sleep over.
My advice would be, if your TV has HDMI then use it. If you later buy other items of AV equipment that use HDMI, then you can just buy an HDMI switch-box.
As a side note, Microsoft have released an updated version of the Premuim Xbox, which now also has an HDMI port, so the only difference is between the Elite and the Premium is the larger hard drive...and the colour! The revised version of the Premium should be hitting these shores within a couple of months and will not cost any more than the old version... in fact Microsoft have just reduced the price of the Xbox range (the Premium by about �30 I believe).