I have an xbox360 premium and a 53" sony rear projection tv
(MPN: KP-53v75).  I use the xbox360 component cable to connect
to the component input on the tv.  When I switch the 360's multi-out
to the "HDTV" setting, I get an extremely blurred picture split in two
- vertically.  If I switch the setting to "TV", the picture looks
pretty good and is normal.  Am I acheiving at least 480p display, and
if not, is there anything I can do?

Do you not choose your resolustion in Settings on the Dashboard?

From the xbox website:

The folks here at Xbox® have taken a bold step by declaring that all
games that appear on the Xbox 360? video game system will support
high-definition resolutions up to 720 progressive scan and 1080
interlace. It's important to note the difference between this policy
and that of the original Xbox® console. With games on the original
Xbox, developers had the option to support HD graphics, but Xbox 360
demands that all games feature high-definition options. To clear up
some confusion, here are a few key points to bear in mind regarding
high-definition support on Xbox 360.

    * You do not need a TV that supports high definition to use the
Xbox 360 system. Like all consoles before it, Xbox 360 works perfectly
on standard-definition TVs (the resolution for standard def is 480
interlace).
    * The high-definition support for Xbox 360 is dynamic, so even if
a game is designed with 720p in mind, but your TV only supports 480p
or 1080i, Xbox 360 runs the game in the best resolution your TV offers
(up to 720p and 1080i).
    * If you do plan on running games in high definition with your
HDTV, you'll need the Xbox 360 Component HD AV Cable, which comes
standard with the Xbox 360 system (not the Xbox 360 Core System) and
is sold separately as well.
    * If you're using the Xbox 360 VGA HD AV Cable to connect your
Xbox 360 console to a computer monitor or TV monitor with a VGA
connection, you'll have the opportunity to select from a variety of
resolutions. They are:
          o 640 x 480
          o 848 x 480
          o 1024 x 768
          o 1280 x 720 (equivalent to 720p)
          o 1280 x 768
          o 1280 x 1024
          o 1360 x 768
    * Whether using the Xbox 360 Component HD AV Cable or the Xbox 360
VGA HD AV Cable, you'll find the resolution settings in the System
menu on the Xbox 360 Dashboard. Select Console Settings in the System
menu, and then select Display to find all your resolution options.

Xbox 360 offers unprecedented support for high-definition gaming, yet
it remains flexible as well. Whether using a standard definition TV
(480i), an HDTV with only one progressive scan option, or an HDTV with
every available option (up to 720p and 1080i), or even a computer
monitor, Xbox 360 will employ the best resolution your TV or monitor
can display.