They'd be smoother with composite/RF as the games were likely designed with such usage in mind. Pac-Man for the Atari 2600 even exploits basic mechanics of CRT displays when drawing the ghosts.

S-Video is merely a separation of the color and Black+White signals resulting in an overall sharper picture. Its a step below RGB but a step above composite with component being between RGB and S-Video. You'll probably find PS1 games look "better" with it than they do with component or through emulators. Thing is with anything but a CRT display I've found composite and S-Video can look quite ugly from the upscaling circuitry. But I'm an anal retentive prick when it comes to video quality.

I'll have to agree with theclaw. This sounds like the video output mode of PS1 games on your PS2 is incompatible with that particular display. I have a 32" Sony Trinitron in front of me that I have my PS2 (v9 fat) hooked up to over component. PS1 games run wonderfully albeit with noticeable jaggyness. Part of the problem with progress is that some things have to be left behind.