what kind of monitor are you using ?

vga?
use a 15 khz arcade monitor and vga box hack...that should give you the scan lines.
I ran dreamcast through extron super emotia scan converter and shows scanlines better then ever.
Never tried the vga box hack but I assume it DOES show scanlines if you an actual arcade monitor.
Here is pic running through scan converter.

this is the wells gardner k7400 monitor.
Oh and the jaginess in sf3 is normal.the spirites are low res and you really cant do much do "hide" the low res sprites.even using arcade monitors..still visible.
Its how the game is.
guilty gear x looks normal though..no jaggy/blockyness.