Even at 480i, you should be getting a better quality image. Primarily because component video splits the signal into three parts, so that there's less chance of signal degradation. It won't be as big an improvement at 480i as it would at higher resolutions if your TV supported them, but it should be an improvement none the less. Just like s-video is an improvement over composite.
A week or so ago I was asking about the Colorstream component inputs on my Toshiba TV. Now this is not and HDTV, and I am not even sure if it is a EDTV, but it has component inputs that work fine with my DVD player.
Now when I hooked the Wii up via component cables and set it to progressive scan mode the screen was all distorted and blurry. However when I set it to 480i in the Wii settings, but still using the component cables the screen became clear.
It is not a big TV, only 20 inches, but do you think I will achieve better image quality sticking with the component in even though it appears to be running 480i?

Chowhound
Comic Vine
GameFAQs
GameSpot
Giant Bomb
TechRepublic