OK, I'll put some more info here.
DVI is the way to go, without a doubt. svideo or composite simply won't cut it for PC display
Each TV has a native resolution & you'll have best results matching that resolution from your PC. You'll probably have overscan (picture bigger than TV) regardless, due to the way TVs work as opposed to the way that dedicated monitors work. Powerstrip will help with this, as well as helping with different resolutions. The help you get from powerstrip will partly be dependent on what driver you have from ATI.
Even with powerstrip + the latest drivers + DVI, I still had enough overscan to cause a problem: I could barely see the taskbar & couldn't see any scroll bars on the right of the screen, so I had to go into the service menu on my TV to fix this. Maybe you won't have to do this (if you do, be careful - bad things can happen here if you make a mistake).
Once I got mine working right, I was hooked: I ended up spending $1500 (some of that was for items that never really got used beyond the first try - they just didn't do what I needed) on software & hardware to complete the experience. The best purchase was the top of the line sound card which gave me some awesome surround sound, due to the fine controls over individual speaker volume. Sound placement in the room was stunning - the best I've heard. Unfortuneately, I was never able to get a video PQ that I was happy with...then marriage & buying a house intervened, so I stopped working on it, got Voom, and now love the picture (although I do miss the surround sound coming from the computer - it has such better controls than my stereo!).
There are lots of free & cheap software like powerstrip, myhttp, zoomplayer, and beyondtv for turning your PC into a DVR. If you have a "typical" hacker mentality, you might just get sucked into a world of video & tweaking that will eat up all of your waking hours, like I did. Getting it all to work can be a pleasant experience, though
Unreal Tournament w/ a 42" widescreen from across the room w/ a wireless keyboard & mouse (not to mention surround sound) is something to be experienced!