HDMI not a must for 1080p

[PBJblu-ray alltheway]

I have read on the forums several times that HDMI is the only way to get 1080p out of a PS3. The owners manual for the ps3 states that it will output 1080p over the component cables. This is from the owners manual.

Input connector on the TV Supported video modes (NTSC region) *1 Supported video modes (PAL region) *1
HDMI 1080p / 1080i / 720p / 480p 1080p / 1080i / 720p / 576p
Component or D-terminal *2 1080p / 1080i / 720p / 480p / 480i 1080p / 1080i / 720p / 576p / 576i
Composite or S VIDEO *3 480i 576i
AV MULTI or SCART *4 480p / 480i 576p / 576i

[DavePS3]

I haven't tried it myself but from my understanding, true 1080p has HDCP (copy protection) and Component cables can't hold or pass that encryption so it has to be passed via HDMI. Now, it's possible that the games themselves may pass through the Component at 1080p but I'd be surprised if the movies will.

[Blue]

Correct 1080p can be sent over component. There are a couple things to keep in mind. Component is an analogue medium, so the digital signal is converted from digital to analogue over component then back to digital (assuming LCD or Plasma) so there will be a small degradation in the signal.
HD disks (Blu or Red) can block a HD signal over analog to supposedly prevent piracy, just the same way a disc can control region encoding. There is a threat this will be implemented on disc's in a few years (allow the older TV's etc to 'vanish' from the market), however there seem to be more effective ways the pirates are operating, so I doubt they will ever implement this.