So the first, major thing you should do is make sure you have deflicker off. That will substantially increase the sharpness of the picture. You can force it off by forcing video mode to NTSC (or PAL) in nintendon'ts settings. Its also worth noting that basically every single analog to digital or digital analog video converter out there that does NOT scale is essentially 100% lag free. This is well documented, and tested by many people in many communities, including by Fizzi. Keep this in mind for planning video setups; it can be very useful information that can open up new doors.
As for the answer to your question, the results will really depend. For 480i, and a desired output of component, your video quality out of the Wii's stock AVE (the chip that converts the digital video bus to analog audio and video) is pretty much as good as you are going to get. You can output over HDMI via GC video, then convert to YPbPr or RGB through a video dac, but your results will be the same as the Wii's stock AVE. RGB or YPbPr video quality will be exactly the same on both, assuming your YPbPr decoding on your TV is accurate. (Some TVs are not accurate and benefit from an RGB mod to bypass the jungle, but thats the result of the jungle chip itself, rather than a reduction in video quality of the YPbPr format itself. Beyond the scope of this discussion)
480p is a little different.
Apparently there is a bug in the Wii's AVE that makes the image less sharp. Extrems found a solution, and a patch is integrated into most USB loaders now. However, the patch as it is now only works on 1 version of the AVE chip. This chip is rumored to be more common in earlier revisions, but even for those its still a grab bag which one you will get. However, installing a GC video HDMI kit into a Wii bypasses the AVE itself, along with its aformentioned softening bug. If you run your HDMI output into a non-scaling HDMI to YPbPr converter, you will bypass the 480p bug. However, you must find an HDMI to YPbPr converter that meets your video quality standards. They can be hard to recommend because they constantly go in and out of stock, and change designs and chips frequently. If you are using a 480p monitor that accepts VGA, an HDMI to VGA converter can be a cheap and very effective way to give it a 480p signal. If your monitor accepts 480p RGBS, you can use a sync combiner to combine H and V into Csync, assuming your monitor does not have issues with the missing sync pulse caused by combination logic propagation delay.
I must say tho, keep an eye on whatever 480p YPbPr CRTs you are using. Many (but not all) HD CRTs add a frame or more of latency during their scan conversion process. Some dual scan or multiformat monitors can scan the 480p video signal at a native 31khz, but they can be uncommon.
TL;DR:
-Turn off Deflicker
-For 480i YPbPr, directly output ypbpr from the wii, doesnt get better than that
-For 480p, if the 480p bug softens the image too much for your liking, you can bypass it with an HDMI install into a non-scaling HDMI to YPbPr converter, with no latency penalty.
-ADCs and DACs will not add latency unless they are performing scaling or some form of video processing. Adding latency requires adding a framebuffer, and cheap simple non-scaling converters do not include them. If you cannot store video data before spitting it out, you cannot delay it; it passes through one pixel at a time without delay.
Quality yes, but latency no. Non-scaling adapters do not add any latency. A good quality DAC conversion should be equal in quality to the Wii's AVE, 480p bug aside. But on the flipside, converting analog to digital, while latency free, usually results in some degree of video quality issues, as optimal sampling can be tricky.
