Improper cabling is the most common mistake made when setting up home theatre systems. Periodically I'll get a call or email from a friend or family member who just brought home their new HDTV, and the picture just doesn't seem right. More often than not, the obvious difference in picture quality from when you watched it in the store to when you set it up at home is the direct result of improper cabling. So here's the skinny, short and sweet.
ALWAYS USE COMPONENT VIDEO CONNECTIONS
Component video provides the best quality image, as it separates the video signal into three channels (red, green, blue), subsequently providing more bandwidth per channel. Audio is carried separately, usually via stereo RCA connections. For true HDTV you'll need to use the component connection, and its obviously ideal for other video sources as well (such as DVD players/recorders).
USE S-VIDEO WHEN COMPONENT ISNT AN OPTION
If your video devices don't support component video but do have s-video connections use them. S-video provides 400 lines of resolution, which in gist means that it provides more bandwidth and a better picture than a composite connection. Again, the audio is carried separately so you'll need to insure you also have an available RCA stereo cable.
USE COMPOSITE ONLY AS A LAST RESORT
Composite connections provide an acceptable picture quality for normal home viewing, but if you have either of the above type of connections and just aren't using them it's sort of like having a Dodge Viper and never planning to even take it out of 2nd gear. I mean I don't personally own a Viper, but if I did, I just might consider moving to Montana.