I would strongly recommend that you may want to consider a Blu-ray player. I'm no beleiver of HD DVD as a survivable format FYI so I don't recommend people purchase in that direction.
PS3 and all other Blu-ray players will output 1080i, 720p, 480p, and 480i resolutions via component video and will look phenomenal on your display. This is not upconverted DVD, which is only available via HDMI from these players, but when you purchase (or rent) a Blu-ray Disc you are getting the real deal. Actually better than broadcast HD! Most of all, it works via component video.
If you just want to give HD a try this way, you likely can rent a PS3 from Blockbuster for a few days to see what it's all about.