More commonly called "luminance signal-to-noise ratio." This is a measure of how pure the video signal is (the monochrome or black-and-white portion of the picture). Tapes with good luminance signal-to-noise ratios have sharper, clearer images.
S-Video has 4 little cables that transfere the data from one device to another while the Composite (yellow/white/red) cable has one wire in it that transmits all the data. The four cables are able to transfer more data at a time compared to the single one so yea, better picture on a decent TV that isn't rather old....
It costs alot for the cable (S video costs $10-15 a cable, component costs $30 for the cable), but all three colors are seperated, instead of compressed into one cable.
component is better than svideo but its meant for hdtv. i use my svideo input to watch normal definition tv or play video games and i switch to component when i watch hdtv or watch a dvd. ive switched btwn the 2 and normal definition looks worse with component than svideo.