True, but you a VGA cable is capable of more than VGA resolution. Otherwise a PC monitor wouldn't work.
I have connected my PC to my computer through a VGA running at around 720P. And my PC monitor is VGA and runs at 1280*1024.
As to which one is better, it depends on your TV, but since there is no official VGA cable as of yet, I would stick with component. Of course if you don't have an HDTV then you will want RGB.