First, to clear away one element that can be confusing: DVI and HDMI are exactly the same as one another, image-quality-wise. The principal differences are that HDMI carries audio as well as video, and uses a different type of connector, but both use the same encoding scheme, and that’s why a DVI source can be connected to an HDMI monitor, or vice versa, with a DVI/HDMI cable, with no intervening converter box.
DVI/HDMI and Component Video are all video standards which support a variety of resolutions, but which deliver the signal from the source to the display in very different ways. The principal important difference is that DVI/HDMI deliver the signal in a digital format, much the same way that a file is delivered from one computer to another along a network, while Component Video is an analog format, delivering the signal not as a bitstream, but as a set of continuously varying voltages representing (albeit indirectly, as we’ll get to in a moment) the red, green and blue components of the signal. Both DVI/HDMI and Component Video deliver signals as discrete red, green, and blue color components, together with sync information which allows the display to determine when a new line, or a new frame, begins. The DVI/HDMI standard delivers these along three data channels in a format called T.M.D.S., which stands for “Transmission Minimized Differential Signaling.” Big words aside, the T.M.D.S. format basically involves a blue channel to which horizontal and vertical sync are added, and separate green and red channels.
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