Hey, no offense to anyone, but I don't think you guys understand how the connectors work ... the Playstation 2 and the Playstation 1 both have a proprietary connector on the back of the unit. This is where you normally plug the "other end" of the composite video cable into the PS2. This connector provides a high resolution video/audio signal, but if you are using a composite cable, you're still limited by the composite cable's 1-wire bandwidth. If you upgrade to an S-video connector or Component cable, the proprietary connector still provides a high quality signal (equal to that of an RGB output which is similar but not the same as what your VGA monitor uses) and it is then downgraded to S-video which provides 4 separate wires or component which provides 3 separate composite connections for each different basic color. Therefore, you will gain the benefit of the S-video or component connector by purchasing the aftermarket cable. I have a PS2 hooked up through S-video and there is a noticeable improvement over composite. DVD playback quality on the PS2 is comparable to a cheap DVD player but it is not up to par with higher end DVD players. X-Box is also a consideration which should provide higher end DVD playback due to its progressive scan capabilities. (It is rumored that this feature will not be included at first, but no confirmation of this rumor has been provided as far as I am aware).
Anyways, you are not limited to a composite connector on the Playstation 2, or the X-Box or Gamecube (which will not play DVDs, but Panasonic's version of the GameCube will for ~$100 more).
EDIT: oops, this took me a long time to write ... Some of the people above me certainly are correct in their understanding of the cables. But when I started there seemed to be a misunderstanding in this thread about how the connectors work for Playstation 2

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