Don't overlook the CVS287 (or its clones on eBay) which is what Dungeonsdeep is referring to. It doesn't do any scaling either. As far as what can be seen on a 15kHz tube, the video quality is almost the same as the TC1600. The downside is that you have to build your own VGA to SCART adapter to use it, which requires soldering or crimping, and might cost you another $20 for parts.
In addition to being plug and play, the TC1600 does have some other advantages. The person selling them also designed and builds them, and he gives top-notch support. The TC1600 also has adjustable gamma, h sync width, v sync width, and h sync delay (horizontal position control). Those last features aren't strictly necessary with MAME though, as things can be controlled from the PC anyhow, but they're useful with consoles. There is a slightly cheaper TC1500 which lacks those features.
Dawgz Rule, I apologize if you bought the TC1600 on my recommendation only to find out later that I'm recommending the CVS-287 as a cheaper, acceptable option. I'm fairly sure you got your TC1600 before I thought to try the CVS-287 with MAME by making the adapter. If it gives you any reassurance, I still use TC1600's for all my projects.