The "S-" has to do with CAPS, as one of the previous posters quoted.

The various reasons people are designated as "SELECTEES" or not are not to be discussed by airline personnel as that would defeat the purpose of passenger screening.

NW was approached by the FAA shortly after TWA 800 (since it was thought that the plane was brought down by terrorists) to develop a program that would "pre-screen" passengers based on information in their reservation.

After it was developed, other airlines purchased the program from the government.