I'm looking to get the DVD player only because I have some DVD's and nothing to play them on, and I won't use it very often. Otherwise, I rent or buy movies through iTunes, or watch Netflix. For me it's all about convenience, so iTunes purchases and rentals to play on my AppleTV is okay with me (I mostly watch foreign and independent cinema, not big special effects movies). I've thought about a Blu-Ray player, but honestly think it would be a waste for me.
HDMI would give a better picture quality then component, wouldn't it? Or since it is SD DVD it wouldn't matter? I read somewhere that upconverting can actually make the picture look worse in some fashion?