Technical Question

If your display is digital (most modern panels and projectors are), there is no "decoding" at all. There are other digital operations that are accomplished (de-interlacing, scaling, etc.).

Kal

Plenty of stuff goes on inside a BluRay player (or DVD player) besides the final digital to analog conversion. Using the HDMI out DOES cut out twice converting the signal. If you use the component video out, the BluRay player had to convert the signal to that standard, then the screen (if not old CRT) converts it BACK to a digital signal.
So the HDMI is WAY better no matter what. As an aside, the BluRay player does more than just pull a perfect stream off the disc and send it to the HDMI. So a better player is gonna do a LOT better than a cheap one. The best low price player by all accounts is the Oppo 83. Which (if you have heard) was just put in a fancy case and sold for $3,500. under another brand name.
So I guess the Oppo IS pretty good.

Thanks for clarifying things. I'm probably going to order the Oppo 80

Elizabeth, you completely gone the other way of what Aberyclark was saying. He said Video quality only(audio conversion and your Oppo 83 player is a different subject for another day). What's with the Oppo 83, this subject was beaten to death every day here on Agone, enough already. Now back to the question, make sure your player can put out 1080P quality. That's the STANDARD display for true Blu-Ray dics, as long as it does and your HD display as well, yes the pictures quality are as good as they can get. The Audio conversion that's another story for another day.