Dreamcast Component cables are
in development.
Personally, I would wait for those because they will absolutely be your best option. They also promise be capable of 480p which would be huge if your TV accepts it.
Another option would be to output via
SCART then
convert that to Component. It will be high quality and lag-free. Most importantly, many gamers do this and it's a tried and tested method that everyone agrees leads to great results. Please note, this will limit you to only 480i and 240p output. So if your goal is 480p, avoid this method.
Finally, (and this is something I do NOT recommend), you can try to convert from VGA to component. But this is dodgy and most converters that do this are not designed for gaming. You'll need to experiment with a lot of subpar converters out there and I recommend you simply don't go down that road. I've tried this many times and am always disappointed with the results. Plus Dreamcast outputs a very awkward 480p resolution that is never converted correctly by these adapters. They're made more for displaying PC's on HDTVs in an office like setting for powerpoints and such, and are not designed for gaming at all. And it shows.