I'll try to answer the question without delving too deep into the technological details. However I am handicapped by an EE degree, so be kind. Part of the explanation involves talking about how TV sets have worked ever since vacuum tubes were new technology, but I'll keep it as light as possible by omitting a lot of detail.
The data on the DVD is actually stored as two "frames" which are 240 lines, with each line being 702 pixels wide. (The numbers are for NTSC television in the USA, the numbers change for other TV systems in other countries, but the principles don't.) Every other frame is "Even" (containing image data from lines 2,4,6,...,480) and between those are the "Odd" frames (containing image data from lines 1,3,5,...479).
In a normal TV broadcast, these frames are broadcast alternately and the "persistence" of the phosphors on the front of the CRT fools the eye into thinking the two overlapping frames are one image with a higher 480 lines of vertical resolution. This is called an "interlaced" signal, and the interlacing technique came about to allow relatively high resolution images from the inexpensive receiving tubes of the 1940's, on displays which were a very large vacuum tube called a CRT (Cathode Ray Tube). The maximum frequency used is the horizontal sweep frequency of 15.75Khz - which made possible inexpensive TV sets full of cheap tubes.
An interlaced DVD player simply reads the data frames (702 pixels wide by 240 lines) and outputs them as an analog signal we refer to as 480i (for interlaced). The signal contains both image data and "sync" information used to control the "sweep" movement of an electron beam across a CRT display, and the maximum frequency is that same 15.75Khz. The rate the image data is being output is 240 lines/frame X 702 pixels/line X 60 frames/sec = 10.1 million pixels/sec (approximately).
A progressive DVD player combines the "odd" and "even" data frames togather into one frame which is 480 lines high by 702 pixels wide, and outputs this at 60 frames/sec. The term for combining the digital data frames (in the digital domain) is "de-interlacing", aka "line doubling" sometimes. On a more modern CRT display like a computer monitor, the electron beam sweeps twice as fast (because modern solid-state devices are better than vacuum tubes) and paints the entire 480 lines 60 times per second - in the computer teminology, 60Hz refresh. The name for such an analog signal is 480p (for progressive), and the sweep frequency has doubled to 31.5Khz. The data rate of the resulting image is 480 lines/frame X 702 pixels/line X 60 frames/sec = 20.2 million pixels/sec (approximately).
Note that the progressive 480p signal has twice as much image data as the interlaced 480i signal, one of two reasons "progressive DVD" looks better than "interlaced DVD" - and the most important reason.
However, there is another consideration. The projectors "de-interlacer" must work with digital data, and the 480i signal, in addition to being at half the data rate of the 480p signal, has been converted to analog.
(Optional paragraph) It doesn't matter whether it's composite video, S-video, or component video, all these are just descriptions of different electrical standards for transporting the 480i signal. Component video is preferable, because it has three coaxial signal wires versus two for S-video or one for composite video, but the bottom line is all three electrical signals were constrained to half the 480p data rate "up front" in the interlaced DVD player. The three coaxial lines of "component video" will support twice the data rate of 480i and can therefore be used for 480p - although composite video and S-video will NOT suffice for 480p.
The projector will convert the incoming 480i back to digital data for line doubling/de-interlacing. When it's done, it will transform back to an analog video signal. Note that the original DVD digital data was converted from digital to analog to digital to analog - a total of three conversions. Every conversion is imperfect and further degrades the image. This is the second of two reasons that 480p images are superior to 480i - the 480p image was "de-interlaced" as digital data, and only got transformed once to analog.
All other things being equal, 480p should always look better than 480i on a "progressive" mode display like a computer monitor or projector. In the first couple of years of DVD technology, it was indeed possible to externally de-interlace a high-quality 480i signal and get better results than a lower quality 480p signal. But technology has advanceed since then, and today a decent 480p signal is nearly always superior.
As a matter of fact, all that "sweep" information for controlling electron beams on CRTs is useless for progressive displays like projectors or any flat panel technology - therefore we have new digital video interfaces that omit such information, and transfer the digital data without transformation to analog - they are called DVI, Firewire, and SDI among others. These digital signals are superior because they avoid the image degradation associated with digital to analog (D/A) and analog to digital (A/D) conversions.
Gary
