Yes, using the S-Video output of the SCART breakout will give you better quality than if you use the composite output of the same breakout. (You can get even better quality if you use a different SCART breakout that has RGB outputs.)
NTSC and PAL composite signals sacrifice the amount of data about the brightness and color of the scene for the sake of squishing it all together on one easy to use wire. S-Video separates the black and white (luminance) from the color (chrominance) signals, removing some blurring introduced in a composite signal. Using RGB outputs further improves quality by eliminating the bandwidth limitations of combining the three color signals into one.
The improvements will be more noticeable when you are using an S-VHS source because S-VHS has a higher luminance bandwidth than VHS. But you will still have some possibly subtle improvements with VHS, too. The way a VHS tape stores the signal is slightly different (color-under) than NTSC or PAL, so there is some extra loss converting for output to composite compared to converting to S-Video.
(Video Engineering is a solid, highly technical reference for older media technology.)