S-Video can't support anything other than standard definition (480i here, 576i in PAL countries).
It looks like the post at avsforum is referring to the graphics card resolution in TV-out mode.
While 640x480 would seem like the natural resolution for TV-out, it's problematic in practice. All CRT TVs have overscan so you'll lose maybe 10-20 pixels all around the image. This would make the Windows Start menu difficult to use and cut off a lot of text on the screen. To compensate, the graphics card scales the image smaller than 640x480, leaving a black border all around.
Since the 1:1 pixel mapping is already lost, it doesn't matter what resolution you start with. The graphics card in that post can use 800x600 and 1024x768. The Windows desktop will be running at those resolutions, but the TV-out will still be 480i.