[UPDATE - 8 Years Later]
I dug the Dreamcast out of storage and have been playing through Skies of Arcadia eight years after shoving it on a shelf in the basement.  I used the VGA converter to hook up to my small HDTV using a standard VGA cable.  Looks great!  I no longer have the little computer speakers to plug into the box so I'm using earbuds.  Still get static with them but nothing I can do about it.

For a 2001 game system, the Dreamcast still looks pretty good on an HDTV with games were designed to have VGA graphics.
[end update]

I recently acquired a VGA converter box for my Dreamcast. I found a new one at an electronics/games store at my local mall. It was advertised for $14.99 but got it on sale for $9.99, this is about the same price you'd pay to get it at an onine auction site.

The purpose of a VGA box is to allow you to hook your Dreamcast up to your computer monitor instead of your television set. Why would you do this? To improve the clarity and sharpness of the graphics displayed by the Dreamcast. This box does not actually make any changes to the image being displayed, it simply converts the signal from one that is recognized by a television set to one that is recognized by a VGA (computer) monitor.

I own a Hewlett Packard computer and am only familiar with IBM clones. In other words, I don't know how something like this would work for a monitor designed for an Apple computer.

The hookup is pretty simple. The VGA box plugs directly into the Dreamcast and the monitor cable which normally goes into the back of your computer goes into the VGA box.

There is also a connection for the audio which allows either computer speakers to be plugged in or headphones. While the headphones make it possible to enjoy the Dreamcast without disturbing others in the room, I found there was a fair amount of static that was not evident when the computer speakers were used. On the upside, using headphones really allows you to experience those games that were programmed to have 3D sound. MDK2 is one good example of this. With headphones on you can pick a source of sound within the game, move your character next to it, and rotate your character in 360 degrees and experience the sound 'moving' around your head. This is something that isn't as easy to detect with just Surround sound or stereo speakers.

The real purpose of the VGA adapter is not the audio output, however, it's the video output to the computer monitor. Prepare to be dazzled because if you've only ever played your Dreamcast on a TV set, you have no idea what you're in for. Details of games that were indistinguishable before are now clear as day. The sharpness, brilliance, and clarity of the images are improved dramatically when run through the computer monitor. The distortion and softening of a TV screen are eliminated and the graphics come through as they were meant to be seen.

If you check the back of the Dreamcast game's jewel case, you will see a number of little box icons. They include things like JumpPack, VMU, and Online. They indicate what additional features the designers included to make the game more enjoyable. Many of these games also include the VGA Cable or VGA Box icon. There is a difference in what these two icons mean.

The VGA Cable icon means that the game is compatable with the VGA converter box. The VGA Box icon means that the game was programmed by the designers specifically for video output via VGA. Think of it this way: VGA Cable means that the appearance of the game will be improved by the clarity of the vga monitor while VGA Box means you'll actually see MORE graphical images and detail than what a TV can show you. That's right, if your game has a VGA Box icon, and you're running the Dreamcast on a TV set, you're actually NOT seeing all of the graphics the designers intended for you to see.

I've found that the games I own that do not have either the VGA cable or box icon still work just fine with the VGA adapter and still look better then on a TV set. Legacy of Kain: Soul Reaver is a good example of this, no icons on the jewel case but it still looks better on VGA then on the TV set.

Some games, however, will look worse on a VGA monitor. How so? Some programmers make use of the TV's blurring and distortion to blend together imperfections in the on screen graphic images. There's nothing at all wrong with doing this, it just means that the VGA monitor is going to reveal these flaws and make the game look worse. Check the back of the game box to see which games with which the manufacturer recommends using a VGA monitor, but keep in mind it's easiest to just try them all.

Two minor drawbacks are the length of the cables and the size of the monitor you'll be using. These cables are not real long. That means you may be forced to pile the VGA box and Dreamcast console on top of one another to give yourself enough room if your computer desk is cluttered with things like keyboards, mice, and printers. Also, chances are that your monitor is a good size smaller then your TV set, it may take some time to get used to the smaller image.

In a nutshell, most Dreamcast games are going to sparkle on the VGA monitor. The cost of admission is under $15. If you don't mind swapping some cables around, I recommend a VGA box for the Dreamcast.

UPDATE
I just did a side by side comparison of my television set and my computer monitor running Skies of Arcadia. I always thought that SoA looked pretty darn good on the TV set...until I compared side by side the monitor and TV. Um, yeah, I won't be using the TV anymore...it looks like crap next to the VGA monitor.

Recommended: Yes

Best Played With/Intended For: Single Player