I tried a component cable connection from my Xbox to my TV in the past, but I needed to switch to NTSC mode (with a sotware switcher) which has lesser TV lines than PAL. And the result was very poor (due to my crap cable, perhaps).
Is there a way to have component with PAL resolution?
Did you try a few resolution modes? (I don't remember right now which resolution I can set when using a Xbox component cable)