HDMI is a better picture signal than VGA. It is digital, VGA is only analogue so go figure. However HDMI, in my opinion, is only a big deal at 1080p. Neither the 360 nor that TV really support that kind of resolution. Since you already own a VGA cable, which is better than the standard Component HD AV cables, I'd say stick with it. You won't notice enough of a difference to warrant the additional cost of an HDMI cable.