An update (and also a report),
I got finally all the parts I have ordered for for the switch, including of course the switch itself, and proceeded with some testing - here are my findings:
Regarding video quality - as predicted, the quality of the video signal is somewhat degraded (Smearing, ghosts). I find that it is highly depentent on output resolution and refresh rate, as well as on the monitor itself.
As I ordered two VGA cables (1m and 0.5m), I find that the cable lenghts do not play any role. The VGA cables themselves however are quite thin, no ferrite cores, and presumably poorly shielded.
When switched to my Apex 486 running Win95 at 640x480 256 colours (Spea V7 Mirage ISA 2MB card), I do not notice any degradation of the image at all on either CRT (AOC Spectrum 9Glr and Samsung Syncmaster 957p).
The situation is worse when switched to my Oakmont 200MMX (Diamond Fire GL 100 Pro passed through Voodoo 2 card) - It is worse the higher the refresh rate. Output resolution and color depth do not matter. I find that it is 'almost' unnoticeable at 800x600 24bit and 70hz. I will however be getting better sheilded VGA cables to see how things improve, I think there is some wiggle room.
DIN keyboard and serial interface for mouse work perfect no trouble at all. Same with the audio switch.
What surprised me the most is that I can actually switch between the two computers on-the-fly, when both are running - it works great, but I suspect the behavior could be highly dependent on the HW configuration of the computers themselves. As luck would probably have it, my two PCs allow switching between then on-the-fly, without any error in mouse or keyboard inputs. Here is a link to a VIDEOI made showing how nicely it transitions between the two PCs.
I placed the switch box under one of the speakers - I observe no trouble with further degradation fo video quality near the speaker magnet. What is the least pleasing is the resulting cable clutter, but that is to be expected.
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Overall - I am quite happy with the switch and how it works. I think it makes for a nice addition to the two-PC setup, making it nicely compact and convenient. I am also glad that I am able to switch between my two particular PCs on-the-fly without any keyboard/mouse communications errors.