DVI is a digital interface. That means that the video signal is sent from the source (dvd, hd receiver, etc) to the output (tv, projector, etc) digitally. All other connections/interfaces (component, s-video, composite) are analog. When you use an analog connection, your source has to convert...
I recently bought the 1803 and I love it. I use it primarily for HT. It has no problem powering my Paridigm Monitor 3's, ADP-170's, and CC-170. I think the sound is phenomenal. My only complaint is the ugly remote, but that is easily fixed with a universal.
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I am also looking into denon receivers, and from what I've read elsewhere on this forum, they don't do conversions between connection types. In other words, it will not convert s-video to component. You would have to run s-video to the tv and switch the tv. I have heard of receivers converting...