I've used a TV-out before, and I must say it's Measly at best. I used a RADEON all-in-wonder with an S-VIDEO output, and for watching movies it was OK, but not great.
however, I HAD a friend with a HDTV, and more importantly Component Input (RGB). He gets computer quality resolutions up to 70xX40x (can't remember the specifics...). His resolution is so good on his HDTV (>50 inches) that he plays games on it as well. The best part of this scenario is that the hardware an outside the CPU add-on. I'm sorry but I can't remember the name, and I don't talk to this guy anymore.
What I do remmeber is this:
The Output to TV does not compress/change/interlace the Video signal coming from your graphics card. It goes straight from the Video Card to the Compenent-Input-Switch to the Compenent Input on his TV. he got it for about 145-180 I believe.
lastly, if you don't have Component input, S-Video will do for you, but make sure you change your resolution down to 640x480.