So I hooked up my xbox to my new hdtv in my bedroom and the picture looks like crap. IT is hooked up through yellow composite. Now what if I buy the component cables, would this make a differences?

 

That is your problem right there, you are using those 1990 cables that is right out of the box. You need to purchase some HDMI cables and they look like this:
http://www.newegg.com/Product/Produc...82E16882379005

HDMI will give you full HD, so you are getting digital picture and audio.
Component will be nicer, but you with an HDMI cable its just one cable that does it all and component doesn't give you full HD and the audio isn't digital.

 

This is the "og" Xbox not 360. No hdmi out.

 

Component should make a HUGE difference. It really does on my PS2.

 

simple answer...yes the RGB component cables will make a big difference.

 

as far as I know component cables for the original Xbox only support up to like 480p or something... but yeah it still looks better. It still might look a little stretched out to fit the screen (assuming you have a decent sized HDTV) but would still be better than the previous alternative.