While I’m having a retro commodore 64 flashback day, I came across this really sweet mod for adding S-video to your C64. Arto has a great write-up on doing this. He’s got a schematic on building the circuit, it looks like you should have most of the parts already in your parts bin.
The article suggests disconnecting the RF sub-circuit which–while I think is probably a smart move if you are looking for the best video quality–is going to be a deal breaker for some people who don’t want to make any permanent modifications to their board. I say do it!