I don't about any HT processor but DVDO iscan ultra will convert s-video, composite video to component video but only upto 480i progressive scan. It has DVI also.
Are you sure you want to spend your money going in this direction? Personally, I would get a DVD player that has component outputs, as well as S-video and then gradually upgrade each component thereafter.
Why service the S-video when you can start with something better? I am only still using S-video on my Sony trinitron and component everywhere else. the sony will suffice while the industry sorts itself out: Component/RGB/DVI/HDCP, etc.