Well for one thing RCA (composite video) looks like living shit. It has bleedy colors, is blurry, is full of dot crawl, and shit color saturation and contrast. RCA is like the worst possible video output you can get, next to the "TV-GAME" RF switch. S-video looks 10X better. You should be glad they didn't give us the lowest common denominator rube shit. You can always downconvert to craposite but you can't go up.
Actually the output on the little cable that is supplied outputs S-Video, which is better than composite. Not as good as RGB or Component, but the reason for using S-Video on the standard video cable is that it's easier to plug it into your television.
I'm sure you're aware of the common standards, but for those who are not, here is a little list in order of quality. I haven't gone into depth here, I have just kept it simple..
RGB: The best you will get. The Red, Green, Blue and Sync signals can drive your monitor directly with no encode/decoding. You get a perfectly crisp and clear signal with no degradation. Typically RGB consists of five signals: Red, Green, Blue, Vertical Sync & Horizontal Sync. Sometimes the Sync signals are combined into into one.
Component: This has separated brightness and colour signals, but the Colour is also separated into two signals, Red and Blue. All down 3 RCA(Phono) connectors. This format is not as good as RGB, but is cleaner than Composite and the colours bleed less than S-Video.
S-Video: This carries 2 signals, Brightness and Colour. This is much cleaner and provides a much stabler image than with Composite. You can create a composite signal from these by connecting the two signals together. The problem here is the Monitor/TV has to then separate them again introducing degradation. If you have an S-Video input, then use that in preference to Composite.
Composite: This has one signal line with everything combined, The device sending the signal has to combine all the signals into one, and the TV/Monitor has to split it all again. Each phase introduces noise and degradation into the signal. Most people don't notice this with Moving video but it's not viable to use this method for Hi Res Computer Use.
RF: Now this is the worst of the worst. This format is designed for transmission as it takes composite video and piggy backs it onto a carrier wave, the device at the other end has to then decode that signal taking away the carrier wave. Both the above introduces yet more degradation and noise into the mix. Never ever use RF if it is avoidable.
It's worth noting that all the above except for RGB have some form of encoding/decoding involved, and that means degradation. RGB is really the only way to go if you want to view a high resolution signal such as your computers desktop.
By the way, I did not mention Hi Definition as I don't think that presently counts when talking about your handheld device. Mind you, neither does RF but I mentioned that just to tell you to totally avoid it at all costs whatever you use.
Edit: I just wanted to add, that using the GP2X with S-Video or Composite is great for Retro Emulation as the older systems would have used either Composite or RF. The spectrum Emulator on the GP2X actually looks better than an original Rubber Keyboarded 48K ZX Spectrum did. Mind you, with my original Speccy I took a composite signal from the modulator input directly into the TV Bypassing the RF altogether, [Fast Show Quote] Which was nice. [/Fast Show Quote]