It depends what your set up is. I'm using a Sony PVM (professional broadcast quality CRT) and it looks fantastic on it. Playing Windwaker in 480p on an LCD HDTV will most likely look like garbage.
Windwaker HD had every right to look better, but they wash out all the colors by adding this really strong lighting to the game that has no reason to be there.
Sure. I can buy that it can look better on that type of Television set (if I recall correctly, the Sony PVM is the ideal TV for retro/SD resolution games). Though aren't those PVM sets relatively rare nowadays as CRT displays get more and more sparse? Personally I disagree that the colors truly look washed out by the lighting system in WW HD, but I respect that's a fairly subjective point.
If you own a PVM set, awesome, but I'm guessing for the vast majority of gamers nowadays who only have a newer TV set that's only primed for HD content, that GCN version is going to look vastly inferior, with or without component cables (as you mentioned). I only bring this up as your initial post seemed to imply that most people just need to locate a GCN and component cables (are these still super rare?) and they'll get a better looking game, but it seems most probably lack the TV to truly take advantage of that.