In no uncertain terms, the component cable is essential if you want to play a Wii on an HDTV. If you were as shocked as I was when first connecting up the Wii to an LCD TV through SCART, then you will be relieved to know that this will restore the picture you may have once had on your old TV. HDTVs don't get on with SCART cables for some reason, so this is your best bet if you want to see your Wii games as intended.
However, this cable will not transform your Wii into a high definition-capable console, so don't expect it to (it's highest resolution is 480p, which is actually "standard definition")! It may not be much better than what's possible on a "normal" television, but at least it matches up to it. It's just disappointing that Nintendo have given those who have upgraded their TVs no choice but to pay an extra £17.99 or so to get the same picture you'd get through SCART on an old TV; the component cable should've been standard with the console, as seen with the Xbox 360. Nevertheless, I am pleased to be able to see Super Mario Galaxy in all its colourful glory once again!
As for paying extra for the official cable, it's probably worth it (although I have no experience with an unofficial component cable) as past experiences with third-party hardware has taught me.