I would go with the BNC adapter.
You can't get something for nothing - passively converting composite, that lacks all of the signal necessary to generate true s-video, will give you the same quality at best but most likely degrade the signal. Maybe an active device (plugged in wall) could do it but those cost $100 of dollars.
If I was going to throw any significant money at it I would buy a ChannelMaster or one of the few other converter boxes that put out s-video (I use a ChannelMaster for s-video and a Zinwell for my VCR (Zinwell has timer function)).
BTW, do you plan on using a recorder in your setup?