For optimal quality with the ps3 you would need an hdmi cable. Although most cable providers that offer hd only give you component cables to hook up to your tv. But you will have better quality with the component cables than you would with just the good ol' red white and yellow cables.
Component video (Red Green Blue) cables will yield similar results to HDMI. Of course, HDMI is optimal -- one cable for video/audio. You can get excellent quality cables at http://www.monoprice.com. Don't buy from BestBuy. Higher price and no difference in quality.
To sum up, yes component will offer you excellent high quality resolution for your PS3. I'm using component for my XBOX 360 and HDMI with my PS3. Very little if no difference between the two. I personally prefer BluRay to HD-DVD.