The biggest problem is probably that it seems impossible to turn off "S-video sharpness" in the drivers. Something that is usually possible to turn off is flicker filter and it should be turned off for maximum quality when watching video.
I have got almost perfect S-video out from my ATI Radeon HD 3450 card by turning off most of the fancy filters and stuff in the drivers.
But it doesn't get as good as when connecting VGA->RGB SCART and that is what I run now. The picture quality on my CRT TV from my PC is now better than from my Dreambox!
See http://www.idiots.org.uk/vga_rgb_scart/index.html for info on what is required to make this work.
burken