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You can get an HD setup with a Hughes E86 decoder box (same as the current Sony/Toshiba decoder boxes) and an eliptical dish for $430 (including shipping) if you install it yourself, and I believe you have to commit to a minimum service. That's from Minidishes.tv, where I bought my setup from...

Considering Bob's comments on the quality of the internal comb filter, an external one might not be the best thing for you, but... You feed it a composite connection and it outputs S-Video (which has chrominance/luminance separated.) I got my VPS-1 off of eBay for ~$100. It originally listed...

Having an S-Video output wouldn't improve things at all. It would most likely make it look worse, except for the digital channels. If it had S-Video out it would likely just have a notch filter. Your analog channels are composite it in nature (as are laserdiscs.) Perhaps the Sony doesn't have...