The problem with the flicker is normal.. The window driver does not support the arcade friendly resolution of

x 240. The lowest it supports is

x 288, and that can only be set by the special ATI control pannel thing (and even then, that a resolution much different than the x240 that you're trying to accomplish!)
just live with it.. it only runs for 10 seconds as MAMEWAH loads.
As far as refresh rate, unlike computer monitors, arcade monitors don't have auto sensing auto correcting holds. You have to manually tune it.
This is why I love to use SmoothMAME or any mame that uses the smoothmame hack. It forces all the games to 60hz and you tune the monitor to 60hz and all is good.
For vertical games, I suggest going 640x480 with H/W stretch. Yes, it might look a bit flickery, but hey, you see the whole picture and playing a vertical game on a horizontal monitor!