The standard Wii2HDMI is pretty much component with HDMI output, so yes, you can play at 480P just fine, just choose it on the Settings Menu. I have one of those, and the image quality is very similar (HDMI seems to be a tad brighter). The only big difference, and this will probably vary depending on the TV, is that HDMI seems to take longer to show picture again after a resolution change, while with component is much faster.
But that's only a problem with games that can't be played at 480P, and only happens for a few seconds so is not much of a deal. What you need to be careful about is if it adds input lag on your TV, on mine (which is not anything special) does not, but I've seen some pretty bad cases on friends' houses.
And newo is right, 480P (or Progressive Scan) can make a HUGE difference in most games. Not only the image quality is sharper and clearer, 480P does away with interlacing, which can be quite annoying with, for example, fast moving games. With interlacing, the image you see is separated into two groups of horizontal pixels, and only updates one group at a time, which can be easily seen in 30FPS games. With Progressive Scan, it updates the entire image, cleaning everything and making it look nice in motion.
EDIT: Oh, and by the way. It might be obvious, but 480P also makes emulation done on the Wii look much better, not just Wii/GC games.