I actually found S-Video made things look TOO blocky, losing a lot of the detail particularly in 2D games.
Well I've tinkered about a whole bunch and almost have it perfect on my LCD TV now, by using a scart switch thingy, maybe if I get a better one of these I can get it perfect. At the moment I have so it looks fine 95% of the time, but the video signal seems to cut out in certain places, varies with every game. In X-Men Vs Street Fighter it cut out at the options screen, the character select screen, whenever you pause the game, the first half of the victory screen, and for the entirely of the lava style level. You'll see them on the screen for a split second then I just get audio.
That is how it runs on any of the TV's NTSC and the PAL60 option, but when I set it to Auto signal, the picture stays put except now you get the video lagging every few seconds, making the games unplayable. Bah, I'm so close to glorious picture quality I can taste it!