Component video, compared with SVideo as a signal transport produces almost the same picture quality from even good DVD players on good televisions.
That said, the limiting factor here is the TV technology itself and the resoulution you're running it at AND the type of chipset used to covert the VGA RGB signal into an SVideo signal..... none of which will be improved by switching to another TV.
Plus remember component video is NOT the same as VGA/pure RGB. Component is a mathematical equation based upon sending a B+W portion and 2 separate color portions, not 3 separate R/G/B portions (that's why it's only marginally better on standard TV technology, you can't really notice a difference unless you're talking HDTV/Plasma/LCD technology) And the fact that I don't know of a single computer video card that outputs component video anyway.
I'd look at using something other than MAME32 as a front end (I assume that's what you want since you're using windows), or attempt to load some video drivers that would let you display windows in a really low resolution or something.
Edit: Adding a bezel hides imperfections and *can* have the effect of sharpening edges by removing the fuzzy light that trails off from pixels. However, it also darkens the screen so you often have to increase brightness (or go into the set and adjust internal controls) to make it as bright/vibrant as without, which of course causes more blooming around the edges of pixels. Tinted bezels were mainly used in the arcades to hide burn-in better, plus to reduce reflection against the glass and light grey picture tubes. New TV's already have a tint built into the front glass on all but the absolute cheapest sets. (Does the screen look black or grey when it's off?), so adding more tint in front of it won't help much.