I'll do my best to figure this out. I'm gonna go on the hunch that you checked that the cables are right etc.

Before I start checking I'm gonna ask, does the TV itself need to be manually changed to 480p? I've seen it before..

Yes I plugged the cables in correctly.  

As for the tv settings: 

I have no idea actually. I was 'browsing' through the menu's with the remote but never came to something like 'include 480p' or 'ehanced definition' or any such.
Weird? Yeah I think it is.. It'll try to see what the tv manual says tomorrow (it lies in some archival sector in my parents bedroom)

I found a site (dutch, though) where it says the TV doesn't support component cables.

http://www.kieskeurig.nl/product/4A55FD87A13DD55CC1256E0A0051841C.htm

Yeah I came to the same conclusion it says

"1 x DVI-numérique - arrière ¦ 1 x SCART ( SCART 21 broches ) - arrière ¦ 1 x antenne - arrière ¦ 1 x entrée audio/vidéo composite ( phono RCA x 3 ) - arrière ¦ 1 x sortie audio/vidéo composite ( phono RCA x 3 ) - arrière ¦ 1 x entrée VGA - arrière ¦ 1 x casque ( fiche mini-phone Stéréo 3,5 mm ) - avant ¦ 1 x entrée S-vidéo"

Now my French isn't the best but I see nothing about Component. Are you sure you aren't stuck using Composite trying to switch it to 480p even though composite cannot handle this?

@ Chrizum, yeah say that too.. really weird cause i'm confident I read in the tv manual a while back that it could do progressive scan. But it said in the manual something in the line of: 'used mainly for dvd players'. Thought that was wierd..
Well I'll update on that tomorrow. Thank god the 480i does look awhole lot better then composite so I did get SOMETHING for my money..:)

Your TV might support an old progressive scan technique, though not through component cables. How? I have no idea. I'm glad your purchase wasn't totally fruitless.

 Lol, my tv has got the following: 1 scart, DVI, S-Video, RGB-channel, and a COMPONENT ENTRANCE that mains that yes it got: audio L and R, it has an Y entrance and a Cr and Cb entrance. 

I plugged all the five plugs correctly so I assume that I didn;t put in a composite cable 

The TV may support Progressive through it's DVI ORR they may use the fact that digital TV's LCD/Plasma are inately progressive as a marketing trick.

See CRT TV's actualy flash half a picture every 60th or a second and the other half right after it you get 50% of an image every 1/60 of a second for a total of 30 frames.
LCD/Plasmas actually construct the full image and THEN display it. Rather than 60 1/2 frames you get 30 full frames. But yeah that could be an issue where like I said just above it isn't truely Progressive. I've actually seen this before... Regardless of that, component cables will still increase the signal clarity and up color saturation which is always good.

Seems weird, yet pausible. Color saturation improved remarkably yes:) Well if it goes over DVI ORR then 480i will have to do.

I looked at the TV and this is everything there is to say about it!  Maybe this helps.

TV:

Thompson Scenium 27LCDB03B

Serial Number: 27LCDB03B FRD105181

Rating: 100-240v, 50-60hz 1.8a

Made December 2003

Component Cable:

Third Party: Speedlink

Wii region:

Europe

Thanks for all the comments, I really appreciate it!

Yeah if it takes component cables but gives problems with 480p it's one of a few problems.

1: The TV isn't really progressive
2: Somethings wrong with the cables(but you'd probably notice this in 480i as well)
3: There's a mismatch in the TV's refresh rate and the sources refresh rate(50~60Hz)
4: There's a problem with the system itself.

After reading about the TV I'd have to go with the first one but the only one I can almost certainly rule out is #3.