Search! Please search, these questions have been answered before, so go to the main forum. Click on the FAQ link, and there is all you need!
Size of the TV depends on you, 640x480 is the best to send to your tv, any other res will have to use interlacing, the TV res is not 640x480, but I can't remember right now, I've heard on flat screen light guns won't work on the bottom of them, I also heard that a component setup won't work with light guns, S-Vid is ok.
Your video out will make windows text VERY blurry. However, a computer monitor has alot more detail then the standered arcade monitor. The amount of blur withen some games sometimes even helps "smooth" over the very obvious pixels you can see on your computer monitor.
TV's are not made to handle still images, anything moving looks fine. Advance mame is in no way needed for a TV video out setup, but if you had a arcade monitor, advance mame is a godsend.
Now, that being said, Go seach! please!