Solved!

I went to Fry's Electronics, bought the Apple DVI to S-Video converter/dongle for $19 (same price everywhere), reset everything from SwitchResX and DisplayConfigX, rebooted, and everything works great!
I can do 1024x768 over S-Video and read text on my CRT TV without changing font sizes!! I turned the "best for video"option on, which I believe is meant to blur the pic a bit, but in my case, it made things twice as clear. Seemed more like the toggle between interlaced and progressive mode on my TV. And a simple check box enables overscan.. so if you need to see 100% of what's going on, you can (came fairly close to filling the screen without going over), or if you prefer to fill the entire screen, turn overscan on and get the traditionaly tube TV treatment.
Now if only audio went over the same cable. it's a bit messy with all these converters and cables dangling from my laptop to the TV. But at least this simple $19 dongle is recognised properly and solves all of the video problems. Not to mention amazing clarity as a res I never thought I'd see over S-Video (1024x768 - great for 720 stuff!). I never had such a great experience with TV output from my PCs!
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