QUOTE(FrostyTheSnowman @ Aug 23 2006, 03:03 PM)

Mode 1+3 is 'VGA' mode for older VGA BIOSes. Mode 2+3 is Component mode, and is the mode used by current VGA BIOSes.
The original 1+3 'VGA' mode was flawed, in the fact that it was limited to 480p,
640x480, actually (which is not 480p).
QUOTE
because the XBOX did not recognize this as a hi-def cable. So, now we simply use mode 2+3, because this mode is Component, and therefore allows higher resolutions. (720p/1080i)
The modes are enabled by grounding certain 'Mode' pins on the XBOX AVIP connector.
Example:
1+3 - Mode Pin 1 goes to ground, Mode Pin 3 goes to ground
2+3 - Mode Pin 2 goes to ground, Mode Pin 3 goes to ground
EDIT: And, about the thread topic, VGA is a MILLION times better than Component. Especially on a CRT monitor. (Although it looks great on an LCD monitor too!)
It depends on what kind of device you use. If it is a LCD/TFT screen with component and VGA inputs, don't even bother with VGA. Both component and VGA need to wrap their sync signals inside the video signal, so you can't get any extra quality in that area.
At the other hand, if you have a monitor with only a VGA input (or which has only one component input which already is in use), then it is worth looking at the right software/a transcoder.
By the way, the only way VGA can
theoretically be better is when it is done by software (natively by the Xbox) and not by using a transcoder. Transcoders change a signal from one type to another, which doesn't add any quality. In the worst case, the quality might even get worse.