Bruce, What Larry is saying has to be correct. Rubbish in, rubbish out. Perfect in, perfect out. Think about it this way. A DVD contains a near-perfect rendition of a movie. We all spend our money on components that can accommodate and process this signal down to the finest detail, but we cannot actually improve what is on the disc. We can only strive to ensure that none of the content is lost by, say, having a crap AV Amp that ignores the extreme frequencies, or a cable that uses lower-quality materials and so loses some of the more subtle atmospherics. In other words, the converter cannot really 'improve' the signal because it wouldn't actually know what to do to make it look better. If we apply this to what Automan1 said (thanks for the info!) then you would gain *some* improvement on your current setup from converting component to RGB, but none by converting from S-Vid. The extent of *some* would depend on the converter's ability to retain the detail/clarity etc between the component in and RGB out). At best (and at £200 this ought to be the case!), you would achieve a component-quality signal.
Incidentally, (and I may be raising my head above the parapet for some abuse here!) receivers are sometimes not great at passing video signals (depends whether the maker included it merely to 'keep up with the crowd'). Have you tried a comparison by connecting the S-video source direct to the TV?
Or you could just spend the cash on an RGB-capable DVD player. As for the VCR, it's only VHS anyway...