The switch for Component 1 and Component 2 switches the input from the dub connector (multiple pin, but one big connector – forget how many – 26?), to the Y,R B inputs (individual BNC connectors for Y,R,B, typically fed with connectors that are Green (Y) Red (R) and Blue (B)). So yes, if you have the wrong one selected, you will not get your video into the unit.
Hope this helps.
Have fun!
Rob