Building a VGA circuit
Just have a look in the Basys2 manual (p.8, Fig 13) how it is done there.
(The Basys2 board is a starter kit for the Spartan 3):



For simple applications with only 3bits for R and G and 2bits for B a simple resistor network seems to be good enough. 

BTW: I don't understand your concern about "require[ing] lot of digital pins" when your FPGA has probably more then hundred digital IOs.