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Yes it does. I have my PC connected to my 40". I use VGA. Originally I tried DVI to HDMI on my tv but the fonts came out odd.

I don't believe it washes out the colors. VGA cable is RGB, maybe you've got bad cable. There shouldn't be washout. FYI, if you plan on getting longer than 6' on your VGA you should go to local electronic store and get a high quality cable (thicker with higher specs) or you will get phasing.