Yeah, double bummer.
But as my 50" RP LCD TV has PAP, and having inserted a non-protected DVD, I could do a side by side comparison of component out (converted to RGB) on my Scart 1 socket (RGB enabled) and Scart 4 (S-Video enabled). The component picture was noticebly an improvement on the S-Video. (S-Video lead is a high quality double screened OFC gold plated jobby) Hence my curiosity as to whether a DVD mod (mine or any one else's) would remove Macrovison off the component. It's looking remarkably like the mod I have removes Macrovision of the S-Video only, not component.
I am now resigned to buying a Macrovision Remover inbuilt in a Scart so that I can at least watch copy protected DVDs via RGB on my TV. Ironically I had a Tosh 330e before "upgrading" to a S/H S7700, and the RGB output was clear. DOH!
But the sound quality between the Sony and Tosh is like night and day. The Sony is an awesome piece of kit. Pity I bought a S7700 which does not have RGB Scarts. I'm sure if it had I would not be in this pickle!