Absolutely worth it. If you have not seen Assassin's Creed on 1080p, you are missing out. (and on 720p, it is pretty damn sweet too).
However, you should check what outputs your 360 has.
If you do not have a HDMI output on your 360 (older 360's will not), I recommend using a VGA cable, not the HD component cable. That will in turn depend on what inputs you have on your HD TV.
If you HDTV has a VGA input - that's the one I would recommend you use instead of an HD component cable. That will give you up to 1080p to your TV. The HD component cable maxes out at 720p.
Given a choice, you'll want 1080p.
If your TV maxes out at 1080i, it might be that the component cable is fine for you. (Some complain about color warmth off of the VGA cable, but mine works flawlessly - even though it is supposed "unsupported" at 1080p on the Sony Bravia).
HD on the 360 is one of the things that makes it so sweet. The resolution upgrade is absolutely worth it. In a heartbeat.