I think his overlay effects come stock with the new video scheme, along with some others. (For some reason, the grills and scanlines look much bigger on my monitor.) Of them all, my favorite is the Scanlines 75x2: it sort of distinguishes things without looking like there's a grill in the way of things. However, I like no effect the best. I can see what you mean about the blockiness, but the clarity of the display overall is like a breath of fresh air compared to scanlines or aperture. On older versions of MAME, I run it either RGB sharp, or RGB sharp with 'switch resolutions to fit'. The latter gives it a natural sort of very fine scanlines. The only problem with it is it doesn't rotate them if the game display is rotated.
I like how your arcade monitor looks. To go that way, I have to find a computer with an AGP slot, or get a new one. (By the way, sorry for mis-spelling your name, there. I thought it looked wrong.)