I was wondering the same thing among other things about S-Video, since I can't afford to get a HDTV and my ol' TV just has to keep ticking. According to some posts, S-Video helps. Here's a link about S-Video and Wii: http://forums.nintendo.com/nintendo/board/message?board.id=wii_tech&message.id=50959.
I don't think it warrants the purchase price just for an S-video cable. Picture is still coming through one signal just like the composite cable your using, unlike component where it is split into 3. HDMI doesn't need explaining even if it is just one cable aswell. I'd just wait until you have an HDTV then buy the component cable. If you know for sure you won't be upgrading your TV then it may be worth it to you but i wouldn't buy it since you may see little to no change at all.
After reading many posts on S-Video, I bought the S-Video cable today. I will say that there is very little difference. On my state of the art 13-year old 42" SDTV , I do see some fuzziness that are gone playing with S-Video. I do not see any brighter colors. If I flip between S-Video and non-S-Video with a click of a button on the remote, I can tell which one is sharper and using S-Video. However, the improvement is so incredibly tiny to the points that just regularly playing is probably not noticeable, in my opinion. I paid $20 for the cable from a major electronic store. At least, I'm no longer wondering if I'm playing at the very best graphics that my TV can show and can get back to playing. For now, S-Video is as good as it gets for me, till I can save up for a good HDTV. Whether it's worth it, well, hmmmm....
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