From what I understand, the way a 240p signal works is that instead of displaying it as 480 lines split into 60 alternating fields every second, the 240 lines from each field are their own frame and aren't alternating like when they're displayed on a TV. On DScaler's Old Game mode, they're rendered as 720x240 progressive frames and then upscaled to fill your monitor or HDTV. On old RGB monitors, a 4:3 60fps progressive image is shown with scanlines inbetween the 240 lines of video data, but they don't alternate and create flicker like on a regular TV.
So I don't think a game console has to do anything special to make a 240p signal into a 480i one, the frames are just alternated between the top 240 lines and bottom 240 lines instead of being shown on the same 240 lines. An RGB cable will give you slightly better quality than S-Video since the red/green/blue colors are all sent separately instead of just the chroma and luma, but if your display is properly deinterlacing a 240p signal sent over S-Video, you won't see a great difference compared to RGB. Similarly, there's not much difference in quality between a 480i signal over S-Video and a 480i signal over component (composite is another matter, of course).