Lots of people use a TV and are very happy. A huge percentage of games in mame worked on what is essentially a TV in reality anyway.
Lastly, I've got a sufficient PC, but it currently runs with a Voodoo 3dfx graphics card, VGA out. I read a lot about SCART cards on other threads. Can't I just get a VGA to S-Video plug? What are the limitations?
There is direct 'plug' for VGA to S-video. The signals are completely different. You can get a converter, which is basically a seperate box that converts the VGA to a S-video signal (and will cost money). However, a huge number of extremely cheap graphic cards have a "TV-out" connector. IE they convert from VGA to S-video or composite on the graphics card itself. ATI has typically had a good reputation for tv-out quality, although Nvidia has improved in recent time.
SCART connectors are found on almost every european TV set. I do not know about the US - a lot less, I think. The advantage of scart is that it has seperate RGB signals - unlike S-video/composite - but like VGA. The frequencies are completely different, but using software you can make your VGA graphics card send a RGB signal to the TV (through the scart socket) that it understands and displays.
The important factor here is quality. RGB signals are the best quality, better than S-video. S-video is MUCH better than composite/RCA. This is why people go for it.
I've missed out loads of info here - it can get quite confusing! - but should help you start. Have a look in the projects page for someone who has used s-video. Several people are perfectly happy with that.