However, S-Video has capacity to handle a tiny bit more "TVL" than DVD, if the cable is really good...
1. What you are probably seeing is about 1000x480i worth of resolution for HDTV, compared to about 720x480i for DVD.
2. Also, HD transfers downconverted to 480 scan lines pretty much always look better than transfers done straight from film to 480 scan lines. (Which some DVD's are mastered from)
3. There is more information in HDTV at 19 megabits per second compared to DVD which is at a lower bandwidth. With careful downconversion, you can get better looking color depth - less posterization. And for well-mastered HDTV material, sometimes fewer artifacts (but not always).
Thanks Mark, that confirms what my eyes are seeing-more resolution plus better color with no hanging or crawling dots. I am not seeing any artifacts either. Of course it probably also helps that my set has a line doubler.