tv-output is great, especially in the videoplayer, because it outputs at a higher res than the lcd screen's 320x240 (check the wiki for details) - fantastic for watching movies. I regularly use my gp2x as a movie player for my TV. plus you don't have to recode anything (usually). it kicks ass.
it supports NTSC and PAL.
I've no idea how you could make your own s-video cable, but you don't need to - the official TV-out cable you can buy has an S-video connection. what a shame my crappy cheapo Tesco TV doesn't support S-video properly, so I have to convert it back to composite again with a little adaptor thingy :rolleyes:
I don't know what its like for playing games on a TV: I've already got a ps2, dc & n64 plugged into the tv, so I've not actually used it as a tv-based games machine. I only use it for games/emulaters when i'm out and about, eg on the train.