Yeah, if you're going the scaling route s-video is infinitely better than composite, not just because of the difference in picture quality (as Duo-R described well) but because scalers with good comb filters, which are needed to separate the Chroma and Luma video signals, aren't as common as one would think. In fact, it's not uncommon for HD TV sets to have better comb filter than some (well known) video processors.
Since s-video keeps those signals separate, there's no need to really worry about the quality of the combfilter and that makes it easier finding a good scaler.
You mention your TV does not have an S-video input, does it have scart inputs instead?