Superman is a lot like Arthurian Legend, in that there's no one definitive version of his story, and with each different take on it, there's a few variations. For example, In the Superman movies as well as in Lois & Clark, the "S" is the family crest of the house of EL. In the current continuity of comics (after the 1986 relaunch) the "S" is a variation on a symbol representing the Kent family. In the "Birthright" story, while I can't remember what it represents exactly, I do know that the "S" means something to the entire planet of Krypton. And it's too early to say right now what the "S" would stand for in the Smallville continuity, but it looks like the symbol is going to be taken from the Kryptonian symbol for "air." But that's just an early guess at this point. The creators of Superman knew they wanted that "S" to stand for Superman, so that's why it was put on him in the first place, and since then there have been many different takes as to why, in terms of the mythology, this character would wear an "S."
P.S. The only thing I'm not sure on, is what the "S" stood for before the 1986 relaunch...I may have to look into that.