Because s-video and composite video are fairly different signal formats, it depends entirely on the video switching provided with your receiver or pre/pro. Some will convert between s-video and composite, while others provide nothing more than basic switching, in which case the s-video inputs are not passed to the composite video output. Also, if your receiver or pre/pro does include conversion, you may see some image quality degradation due to the conversion process. For the most critical sources (such as DVD), I would recommend carrying the same format all the way through no matter what. If the receiver will convert composite to s-video, it might be worthwhile to try connecting the VCR as you are describing to see how it looks.
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