On my CRT sets S-Video makes a huge difference in colors and image clarity. On some sets with really advanced comb filters the difference between Composite and S-Video can be muted, but the actual image quality between the two is actually as big as Composite to Component or RGB. I actually consider S-Video equal to RGB, and Component equal to HDMI, so long as the resolutions are the same in the comparison.
To the OP, for years I have preferred playing SNES over Composite rather than S-Video because of all of the low resolution aliasing that S-Video exposes. Now that I have an RGB to HDMI adapter for my Genesis and Master System though, I am starting to enjoy the higher quality colors and find myself more able to overlook aliasing and dithering that is exposed by the better quality video.
Sticking strictly to native hardware support, I tend to prefer having the following cables for these systems:
NES: Composite
Master System: Composite/RGB
Genesis-Sega CD-32X: Composite/RGB (32X has very good Composite)
TG16/DUO: Composite (requires a mod for RGB, but DUO/R has great Composite
SNES: Composite/S-Video
3DO: S-Video
Jaguar: S-Video
Saturn: S-Video
N64: S-Video
PS1/PS2: Component
Dreamcast: VGA to Component
Xbox: Component
Gamecube: Component
etc.
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