Standard Resolution CRT TV's can only do 640x480 or 800x600 interlaced(can look crappy)  The ATI drivers are detecting you are using a t.v. and working appropriately.   ArcadeVGA was intended to use with real arcade monitors.  And could give you a sleuth of low resolutions for arcade games.  I have one with a Tri-Sync Wells Gardner that works well, other than I have a hard time finding a perfect resolution for a lot of arcade games.  Robotron was really tricky, and all my fighting games cps1/cps2/cps3, wanted to display in widescreen (bars on top and bottom).