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No, a vga cable is not needed for the xbox 360. However if you would like to hook you xbox 360 to a computer monitor then you would want a vga cable.
there are many including the VGA cable, the controller, the console and various other cables and cords.
There are a couple ways to connect VGA to HDMI, the easiest are either using a converter or a cable. What you choose should depend on your needs. A converter is a box that allows you to connect your VGA component and your HDMI component into a box and converts the signal. The cable connects on one end to your VGA component and the other end connects to your HDMI component and can vary in length.
The size doesn't change anything. Its how you connect the console to the TV. You will have a standard VGA connect, HD cable or HDMI cable. Your TV will provide you with ether a VGA cable (none HD tv) or a HD/HDMI cable (HD ready or Full HD 1080p)
Not necessarily, most tv's should have Component (Red, Green, Blue, Red, White, Yellow inputs) as well, and all monitors should have a VGA port. Both of these are HD compatible.