The answer is still yes. The only thing the PS3 cannot do (and the HD DVD players, for that matter) is scale SD DVD up to 1080p via component. That is only available via HDMI. There are some exceptions to this rule (burned discs), but that is the general rule.
Yep. I just use component output (via the ~$20 breakout cable) for 1080i output to my non-HDMI RPTV -- it doesn't offer 1080p via component out, but that probably won't matter. And like Stephen points out, only thing you cannot get is upconversion for regular DVDs, which is par for the course w/ most any other players whether Blu-ray or HD DVD or regular upconverting DVD players. Oh, it also does not pillar-box 4x3 DVDs via its 480p component out, if that matters to you.
Yes this is incorrect. All BD and HD players can display an HD image over component. What you are probably thinking of is the ICT (image constraint token) which when used will downrez the image from HD to 540p if displayed over a non HDCP connection. So far this hasn't been used and is in the specs for both HD and BD. It has shown up on a few HD titles over seas, but not in the US. It probably won't be used for another couple years if ever. Personally I think it is the most anticonsumer thing they could put on these discs. It does zero to deter pirating, which is why it was made in the first place, and only hurts the honest consumer trying to watch HD material on their HDTV from a few years ago.
if movies studios eventually implement HDCP (copy protection), then componenet output will be scaled down to roughly DVD quality, but for now component works great right up to 1080i.
HDCP is employed right now. It's the ICT Flag that you're thinking about, which will do what you describe. It's my opinion also that it will never, or rarely, be implemented. Pirates want digital and don't seem to give a hoot about analog.
I recently bought a PS3 and I have it connected via component. However, my Sony RPTV (which only goes up to 1080i) has a DVI connection and a optical input. Will the PS3 upconvert standard DVDs using the DVI connection?