Congrats, i'd say go with the component cables. They made my Wii look better so an actual HD console should improve a bit.

I cannot do HDMI, but are the component cables worth the extra bucks.

IMHO I would say yes, you can most likely find a set of cables cheap.

Read what I wrote a few posts up in regards to Oblivion GOTY.

Yes, all you are getting is 480i with composite.  Go buy some component cables.

Is the Goty edition really worth it, or is just morrowind good enough?

Congratz hope you enjoy your PS3.

I'd say Component cables are worth it, especially if you have a good TV. I'm quite sure you'll find a set at an affordable and acceptable price. Do they sell Hi-Fi stuff at Newegg perhaps?

Well you could buy Oblivion, and then get the Shivering Isles expansion if you like it.  It should work out to the same price as the GOTY edition.

(Morrowind is ES3)

They make a huge difference on my Wii therefore it's safe to assume they'll make a lot more on a PS3.

Morrowind is a different game from Oblivion. It comes before it.

IMO you should grab Oblivion for PS3 off eBay for like $25, then download Shivering Isles expansion later on. The PS3 version already has Knights of the Nine expansion so you should be good for at least 70-100hrs.

It will still cost you the same if not less than grabbing the GOTY edition and you won't have any game hindering bugs to worry about.