Getting component cables should help out a good bit but you might still notice some pixels.
This basically happens because your TV is a much higher resolution than the source image and has to make the lower res picture fit the screen. Basically, it's like image resizing in MS Paint. Color issues also amplify pixelation. With component, you'll get much better color and you'll get pro-scan with many games at least- which will help a lot.
For the PS2, get Monster cables and avoid the Sony/other 3rd party ones. MS makes great quality component cables... no need for anything else. It's not so much for the image quality as it is for bandwidth. The official cables can carry more data so you'll notice less Vsync issues (it's when the image doesn't line up properly).
