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@Onna76:

I think the image improvement you're seeing has a lot less to do with which standard is being used (480i vs 576i) and a lot more to do with the fact that composite cables provide a vastly inferior signal to component cables.  Honestly, even on an SDTV, and using a SNES as the source, I can easily see the difference between composite and S-Video.  Composite is fuzzy with bleeding colors, S-Video is crisp.  Same thing you're seeing.