First thing you should do is ditch the ATI component dongle.
Take the VGA out to a external VGA to Component transcoder. Both Key Digital and Audio Authority make one, but the AA unit performs better.
Powerstrip is your friend. It will allow you control of overscan, position, and size.
I use ATI radeon cards along with power strip and tune everything to native pixel size. Some displays are more stubborn than others about timing and frequencies.
Here is a good reference to Powerstrip and timings:
[Link: digitalconnection.com]Achieving 720p and 1080i is possible on most displays with most ATI cards