Hey there. I know it's over a month since this topic was last discussed, but while searching for something else, I ran across this and thought I might be able to help. I have an HDTV, a Radeon 9600 Pro, and ATI's component adapter. I did get it working right off the bat, no problems except the expected overscan. Running the desktop in 640x432 was a slight compromise, but not very satisfying.
Then I discovered Powerstrip, as other's have mentioned. Now maybe I have missed it (I searched around to see if anyone else suggested it) but I'm surprised that no one mentioned using Powerstrip to display your desktop in 540p mode. When I discovered Powerstrip, I found a lot of information on the net on how to get your 640 x 480 desktop displayed in full, zero overscan, in 540 progressive scan. I set it up, and it was absolutely beautiful. On top of that, I was able to set up 720 x 480, 856 x 480 (perfect for widescreen), and 1772 x 1000 (1080i mode) with no overscan, and 1920 x 1080 with some inevitable overscan (but not much). The difference is ridiculous. For HTPC users, Powerstrip is as wonderful a piece of software as MAME itself. So I highly recommend digging around for the info on how to do this.
Apologies if anyone else covered this in the past. If anyone still cares about this thread and would like more help, I'll be happy to expand on my explination.