S-Video is easier to include on the system than RCA jacks, plus it usuable Europe, unlike most RCA jacks. S-Video does indeed send a color signal and brightness signal, that allows for more color data to be sent and therefore a better picutre is usually produced. Apple's PowerBooks ship with an adaper from S-Video to RCA (Composite) jacks, for use with older/cheaper TVs.
It is true that no audio is sent through the S-Video cable, however you can easily use a stereo mini-jack to left and right RCA to send sound.
I usually use my S-Video on my PowerBook to watch Movies on my Mac, or even QT movies.
TEG