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I've already got three components with component connections vying for the two inputs on my TV. Throw in the PS2 and X-Box and I have no idea what the solution will be to that problem.
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I have my PS2, GC and Xbox running component cables through a $15 composite video switcher into a single component input of my HDTV. I see no loss of visual quality, but you'll need another switcher (or your receiver) to handle the audio.
For RPGs, you can pick up a lot of great PS1 titles (Vagrant Story, Chrono Cross, Xenogears, FF titles) cheaply. When you get the Network Adapter you'll get online Madden and Frequency demos. Try Auto Modellista or SOCOM.