I think mode S is more for a TCAS use.
If you have "TCAS I" you will be given alerts of other aircraft in your path. If you have "TCAS II" you will be given an alert, as well as a resolution, ie "climb, climb." The TCAS system is transponder based system, so if a plane is out there flying with out a transponder, or they have it turned off, TCAS will show nothing, and make no advisory.
The mode S/C differences are in the resolution TCAS gives.
If you are flying a plane with Mode C and no TCAS, you look for traffic on your own. ATC will be receiving secondary info from your mode C. Also, other aircraft with TCAS will know you are there.
If you have Mode S and TCAS II, you will see other aircraft on the TCAS, and will be given a conflict resolution. The part that makes Mode S nice, is if two planes, both with Mode S and TCAS II are flying at each other, as in like two B757's, Both planes will get a conflict resolution, but both plane's transponders will communicate with each other, and give a different resolution. ie, one will be told to climb and the other will tell you to decend.
So if that hasn't confused you more then before, TCAS I gives alerts, TCAS II gives alerts and resolutions.
Mode S planes w/ TCAS II will coordinate the best resolution.
hope this helps, if not i'd bet someone else can explain it a bit better.