Believe it or not, the consensus over at *************** is that you get a better picture from Tivo using composite, rather than s-video. My personal experience is that they're about the same -- which suggests there's something funky about Tivo's s-video, since it should be noticeably better than composite.
I have another reason to believe there's something Tivo's not telling us about its s-video. I recently purchased a s-video -> component decoder so that I could attenuate red push. Although all of my components (including the decoder), cables etc., worked fine otherwise, when I ran the Tivo s-video feed through the decoder, the result was black and white.
I posted some questions over at the Tivo Forum and got a lot of condescending responses that my cables were bad or there was some other problem, but "it couldn't possibly be Tivo." At the recent HE show in NYC I had a chance to speak with one of the pre-eminent, legendary HDTV engineers, who now runs his own company. He told me that the problem most probably was that Tivo's s-video signal was non-standard (i.e., outside the scope of accepted range limits). Since all evidence on my end points to the problem being Tivo's s-video signal, I think his hypothesis is plausible. And, it could also explain why your Tivo s-video signal looks so bad (in addition, of course, to DSS' GIGO problem).
Just my 2 cents.