I've been playing around with it myself and got some very good results. One of the problems was that
a: I have a high res LCD that doesn't look amazing in lower resolutions (see b)
b: I like the crispy pixelated look of old arcade games, it feels more authentic.
c: At high resolution, the standard scan line art that comes with Mame is so sharp it can cut a man into pieces. Super tiny lines, impossible to make out, doesn't look great.
So, I found that you can use D3d without the antialiasing look of hwstretching if you input -noflt (no filter)
Then, I used one of these two scanline PNG files (I copied them from other designs and rescaled them, pick one or make your own!)
Looks-a-good to me!