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I was eyeing a SCART-modded PC Engine and was wondering what sort of output to expect if I were to use an HDMI converter. Is it a dramatic difference? Anyone have an opinion?

Considering the resolution of the TG16, I can't see any improvement over RGB or even S-Video.
A lotta money for a transcoder to get the same pic.

Converting RGB/Scart output coming out of the back of the PCE to HDMI won't magically make it any better and any time you convert a signal, it will get a little bit worse. RGB and similar mods on systems tap into raw signals before they're converted to lesser formats on the way to the normal jacks on the back of the system. That being said, scart to hdmi should be pretty indistinguishable as far as quality goes, especially since the PCE has great picture quality. A converter will probably be expensive though.

Hey thanks for all the info. I was sort of skeptical about any noticeable improvements in picture quality. The system hooked up with the basic yellow, white, red cable (that's component, right?) looks great. Thanks again for the input guys!

No thats composite. At least its better then RF.

Ah thanks, I always get them confused. Component is the red, green, blue plugs?

Yes, just for the video, two additional cables white and red pair for audio.
TG16 won't support that out of the box, really over kill considering the resolution anyways.

Read my LCD vs CRT signature link for a full article concerning video inputs.