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1) Does the component output of HR10-250 output a full resolution? I recall reading about studios wanting everyone including DirecTv to down-rez all HD content on analog outputs such as component out.
The component out does indeed pass all the resolution for now. I suppose sometime in the future everyone will eventually need a digital signal path that supports HDCP encryption.

2) Does the HR10-250 output SD channels as well as HD channels on the component outputs? If so, does it have a decent scaler in it? Does SD scaled to 1080i by the HR10-250 look noticeably better or worse than the s-video out?
The scaler will upconvert all channels to a 1080i signal. I think it does an okay job...nothing great. You can change the resolution with a remote button to 480i, 480p, 720p, 1080i if needed. I would say IMHO that the scaler does a better job upconverting than the signal via S-Video. Just gives a better and sharper picture.

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