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It really depends of the tv that you have. I bought a 26 in Vizio LCD to use as my xbox360 tv and my computer monitor. At first i hooked up the rca cables but had horrible picture at 480. But with the component cables you can have up to 720. If you have an hdmi cable you can reach 1080 or higher! I am actually doing this as we speek. I plugged the hdmi to my xbox and then to my tv, to my suprise i achieved 1360x726 resolution. But all TVs are not setup the same way. Some can only handle up to 1080. I bought this tv last night for $258+tax n stuff at Walmart. On the Vizio website it retails for $450. In short, go buy this tv if you want quality that's not heavy on the wallet.
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