HDMI stands for High Definition Multimedia Interface. It is a standard for interfacing multiple devices like players, TVs, computers, and video game consoles. On the other hand, a component is an analog means of transporting individual signals from one of the technologies that are breaking ground.
The component needs a single line for each of the data streams it requires to transmit video game consoles. On the contrary, HDMI utilizes a single cable transmit of SD or HD video signal, a user electronics connection, and up to eight channels of audio signals.
HDMI is the preferred connection when using LCDs. LCDs are digital devices that need digital data to display. A component is suitable as your source analog, but HDMI maintains the source's information to your screen.