I've never seen an onboard video controller that offered any kind of TV out. I'm not even going to suggest a scan converter as an option. A cheap, bottom level graphics card would probably be cheaper than a decent scan converter, and would net you a (largely insignificant) boost in performance as well.
The problem is that most low-range GPUs no longer come with any kind of TV out, because it is cheaper to just to include HDMI, VGA and/or DVI (as well as the fact that nVidia drivers, and possibly ATi ones as well, no longer support S-Video in Windows 7); however, make sure you end up getting a modern one. Sub-$40 GPUs do contain cutdown versions of perfectly modern cards, but there is also a bunch of really terrible and outdated stuff among them like GeForce FX5200s and Radeon 7000s (the Wal-Mart website even has a rebadge of that lovely bottom tier junk dating to 2001, the GeForce MX440). There are GeForce 8400s availablewith S-Video out, so see you can find one of them that you are okay with.
Edited at Mon Aug 2, 2010 2:07:21 AM
Michael: Jodie, how's my schedule look for today? Jodie: You've got a conference and dinner party at the Japanese Embassy regarding wildlife protection. Michael: Oh, yeah...sorry, but I'll have to cancel that. I'm heading out to save America!