Well, our setup is as follows:

Cable box / dvd player (audio only) -> Receiver -> Speakers

Cable box -> HDTV with hdmi cable.

DVD player to HDTV with component cables.

Alright, well, I used to have my xbox 360 hooked up with the tv, until it was moved to the on in my bedroom.

Then I just hooked the DVD player to it with composite cables until I was able to get component cables. For some reason, with component cables, video seems to be poor quality. The HDTV from the cable box, with hdmi cable, looks perfect.

Does my 360 really make that much of a difference or is something wrong?

any ideas?

Maybe a bit clearer explanation.

I now use a DVD player instead of my xbox 360 with my HDTV in my living room. The quality is not very good, AT ALL.

The HDTV which uses the 360 is great. (both are regular DVDS)

Well component is analogue and unless the manufacturer has ignored the rules there will be no scaling going on so the DVD is sending at best 576p which the TV is scaling. It may be that the 360 was scaling the DVD output and was better at it than the TV so you got a better looking picture.

I would try connecting the DVD player up using a Scart cable (RGB) to see if the picture is equally as bad or 'magically' improves. If you see no difference then this could indicate (as intimated by Jarrak) that the scaler in your TV is not that good. If the pictures improves using RGB then this could point to the players Component video conversion being poor (I'm assuming you have checked your settings on both TV and DVD player).