to the original OP - Stick with the ATV2 until you get a new TV, chances are at some point they will update the ATV again and you might as well get the latest one when you have a TV that can support it.
to the second poster regarding the HDMI/Component converter. Make sure you bought an 'Active' HDMI-Component converter and not just a passive cable.
For instance, if you bought something like this:
http://www.bestbuy.com/site/eForCit...HDTV/4668932.p?id=1218500988128&skuId=4668932
It won't work because it is relying on certain pins of the HDMI port on the source to already have component video on them. The ATV does not.
What you need is something like this:
http://www.monoprice.com/products/p...=10114&cs_id=1011410&p_id=8125&seq=1&format=2
This takes the HDMI signal and reprocesses it to component. Theoretically it should work with everything, but HDMI/HDCP is a funny animal and the handshakes between devices sometimes don't work well. But considering what you have told us, it may be your only hope.
If you provide specific model numbers for your TV and component adapter we could hep further.
i totally forgot to get the model # last night. my apologies. but in terms of the converter. i bought the one from ebay from eforcity and it does not seem to work. the one from monoprice looks similiar. or is it different internally?