Any type of cable, digital box, satellite, etc. won't look good on an HDTV. The only thing that will look good is shows in HD on specific HD channels. I forget which, but 90% of the channels you probably have are using 480i or 480p resolution, and your tv is at least 720p, maybe more. So what your tv is doing is stretching that small picture to fit your screen, and it looks pretty bad.
So I say get the HD package if you have directv I guess. A component cable might help a bit, but it's the source signal that's most important.
Also, another thing you could do if you don't want to spend the money buying an HD package with your cable, is you can buy a cheap antenna and some local channels, and major networks, nbc, cbs, etc. broadcast digital tv over the air, and an antenna can pick it up and you can watch HD that way too. But barely any channels do that.