I have been following this thread
http://www.racketboy.com/forum/viewtopic.php?f=25&t=37716 for the past week or so, I tried out the mod and it worked great. Figured some people here would like this if they didn't already know about it.
Read through it all though because there was a couple of different ideas thrown about.
To put it simple, take pins 1 (red Pr output) and pin 24 (blue Pb output) from the S-ENC chip and pin 7 (green "actually Y or Luma") from your A/V out and ouput plug of your choice to the appropriate input on your TV. I used a 9 pin to RGB cable from an old video card I had.
This worked and the picture is so clear, however it worked with issues (image shakes) on my 720p plasma because of the fact the TV didn't like the 240p signal, but on my CRT it was smooth sailing. You can pick up inexpensive upscalers that will accept 240p then I'm sure it would be fine if you were to run into the issue I had on my plasma.