Well, some people say the ONLY way to go is component.
If it were me, I wouldn't waste the 200 on a new TV, the RCA hook ups might not be as sharp a picture as S-Vid, but spending 200 on a TV just for the S-Vid.... well, if you have the money, go ahead.
Alot of people on here use a S-Video to RCA cable. What you have to realize is that in a heated game, or even a regular game, it's not going to distract you gameplay wise. There is that S-Video to RCA cable, it will IMPROVE your picture, but it will not be S-Video sharp.
All that being said. I'd just use the RCA jacks. And heck, if you get a video card with s-vid out and buy a S-Vid to RCA cable for that tv and just can't stand the picture, THEN by a new tv, but I highly doubt you will want to.