
Hi Eli,
Component is a three cable analogue connection (red, green, blue) that carrys video from a source (like a DVD player) to your telly. A separate phono lead is required to carry the audio. Component can carry high definition video although I'm only aware of it going up to 1080i (as in the case of Sky HD).
HDMI (High Definition Multimedia Interface) is a digital connection for linking high definition sources such as a Sky HD box/Blu-ray player (or indeed standard DVD sources) to high definition capable displays. It also can carry multi channel audio.
Hope that's of some help.
Al