I went for the '981 because of it's better processing chip(s). Unless you NEED component output spend the extra bucks for the 981 (IMHO). I love the picture this player gives!!

As for hdmi to component conversion ... I don't understand why this is viewed as taboo. ALL DVD players output analog component video (maybe with macro vision crud attached) so why should outputting an up-sampled version be illegal? Hell, even BD players are putting out analog component video IN HD!! (again, maybe with macro crud).

My TV has 4 hdmi inputs, and the audio is included, so why not just use a single cable? I do have the optical sdiff output going to my av receiver so I can make use of the dobly digital soundtrack. The only reason NOT to get the '981 is if you have a DLP based TV and don't want to deal with the macro blocking.