Jjust give a bit more detail, ie make of tv, has it got hdmi sockets, then make of blu ray player, rgb is video format usually via scart but can be via hdmi as well, component is an analogue signal and has its own particular leads, hdmi is digital.
ie which option is best for HDMI - RGB or Component (YCbCr)
The answer is depends what u are doing. If u are playing video games on a pc or console for example then HDMI (RGB) will be best as RGB is typically the format used in console graphic cards.
If u are playing Blu-ray/DVDs/AVCHD then HDMI (YCbCr) is a better choice as it is the native format discs are encoded with and (can) offer a wider color space.
Forget the first 2 replies pal. Sounds like theyre novices!
It should be set to auto/component for all dvd and bluray playback as that what its recorded in (Setting to RGB will mean it has to convert it 1st which is never good)
RGB is for games machines like the PS3 (So if you have a PS3, it will output RGB for games, but setting to auto will output component for blurays and dvds)
I noticed this on the xbox 360 picture setup , after you set what connection it gives you a list of options to do with RGB or YCbCr , I also was a little confused as i thought HDMI was digital and these settings made no difference , but obviously do
weather we can actually see a difference i have no idea