The S-Video In is not operational. I asked MS this question and they say its either for a video source for when you connect to WebTV and need an input to attach an image or for possible future upgrades to use.
Your best bet now would be to either use an A/V receiver or VCR with multiple inputs or if your TV has more than a single S-Video input, to use that. I'm guessing these are probably not options or you would have already used them.
There are s-video selectors that will accomodate several s-video and audio inputs and allow you to switch between them. They range in price from $35 to several hundred depending on how many features they have. Some have remotes while some only have buttons, etc.
Do a search in the forum for them and I'm sure you'll find more if your interested.
foghorn