Ah yes... you are looking at garbage.
More details, as covered extensively throughout this site:
There is no such thing as a 'normal' connector for video, there are six types of video connectors that you most often see...
1. Composite - A single connection for video typically with a yellow plug and RCA connectors on both ends. Lowest quality of video possible.
2. S-Video - Uses two cables inside a single wrapping. Typically with a mini-din connector on both ends. A bit better than composite, but not much.
3. Component Video - THREE separate wires typically with one red, green, and blue RCA connector on each end of the cable. The lowest type of connection necessary for HDTV and for progressive scan DVD. This is the minimum connection required for a decent looking image.
4. & 5. HDMI & DVI - Digital cables with a single connector on both ends that is proprietary for either type. Both transfer digital video down the cable where it is received and decoded by the display device. Very comparable to a component or DB-15/SVGA connection.
6. DB-15/SVGA - This is what you find on the back of computers and monitors and uses a small 15 pin connector and cable that provides excellent video quality. This is almost exclusively found on computers.
So, with your BEST connection being s-video, you are definitely losing out on video quality. For testing, if you don't have HDTV, then you should hook your DVD player up via component video, turn progressive scan 'ON' within the DVD player, make sure the DVD player is set up to feed a 16:9 television, and then see how the image looks.
I would expect that you will see a drastic improvement.
Long, but I hope that helps you understand why the video quality isn't the best.
For audio, you really should be using a digital connection between your DSS box and the surround system. Either digital optical or digital coax. Pick either.