It will depend if the act labs gun draws its overlay (tiny white dot when it gets fired) via the decoder box, or in software by a signal back to the computer and draws using software to the video card.
If the actual overlay is done inside the box, the TV out version will not work, with the TV connected via component video, and the gun via the S-Video out. If on the other hand the overlay is done via software, then it might work.
However, there is a method that MAY work, if it does it inside the decoder box. For this, you will need the VGA version of the gun, and an EXTERNAL RGB to component converter, and possibly the arcadeVGA. For this setup, connect the gun decoder to the VGA card, and the output of the gun decoder box to the RGB to component converter, and then pass the output of the converter to the TV via component in.