i have a samsung 1080p 50" dlp. the wii doesn't look so great on it because the screen is so big, and i sit only about 5 feet away from the tv. i am using component cables, and a lot of times stuff will look square/boxy. i think the wii might actually look better on a smaller tv or one with less resolution. basically, the 1080p doesn't help at all for the wii, as a 480p will look the same. you'll only be spoiled watching 1080 of anything else. the wii isn't the right system/reason to justify paying for a 1080p tv set.
you generally can't upconvert component signals; only through hdmi.