There are many opinions on this.
On almost all video cards, the component that handles TV-out is seperate from the graphics processing chipset itself. Buying a more powerful card won't necessarily increase the quality of your video out.
Cards manufactured by ATI are widely regarded by the MAME community as offering the best picture quality via TV-out. A few people prefer newer Matrox cards, which have always been legendary for image quality.
Note that I said "manufactured by ATI" above - ATI now sells their video chipsets to other companies who create their own "Powered by ATI" cards. The TV out quality is often not as good as the cards "Built by ATI" as these companies may use sub-standard video-out components.
nVidia only manufactures their chipsets to be integrated into other company's products. Like the "Powered by ATI" cards above, TV out quality may vary from company to company - some good, some poor.
I have first-hand experence with the Rage card. IMHO, the TV-out quality was great, but the card was too old to properly support hardware stretch, so games stuttered with this option enabled. However, this is not a necessary feature to run most games full screen (you can manually specify the resolution instead, which works fine)
If you decide to upgrade, keep in mind that MAME performance is really not affected by the video chipset/memory - its entirely CPU dependent. DON'T spend a lot of money on a high-end card. If you decide to stick with ATI, get the cheapest Radeon card "Built by ATI" that you can find (I have a Radeon 7200, which works great for MAME TV-out). Another cheap option might be the Matrox G450. I believe both cards can be had for well under $50.
At any rate, in terms of image quality, you probably won't do much better than the Rage. If you're unhappy with the lack of adequate hardware stretch support, you may consider upgrading to a newer (but still cheap) card.