Hey dude, sounds like you're having the exact same problems I was having.
Your green torn screen (image) looks like mine did at first when I had my CPU monitor (DVI out from the AVGA2) AND the VGA breakout going to the arcade monitor AT THE SAME TIME.
I unplugged the DVI -> CPU monitor and it fixed the ripped screen. (I think its trying to split the signal, hence the split image) Then I restarted my computer, with only the VGA breakout plugged in. Great success.
Then, I had really bad color problems. No amount of fiddling with the adjustment pots on the monitor chassis would help. I even downloaded the tech manual for the WG series, and tried

to do a white balance... no avail.
I ordered a new breakout cable from Divemaster
http://forum.arcadecontrols.com/index.php?topic=47066.0 and it fixed
almost all problems with color. Now I just can't get red to show up in balance with the others. Be advised that Divemaster's parts are what you'd get from Ultimarc, only shipping costs less cause hes in the US (I'm assuming you are in the US, if you are in UK, stick with Ultimarc)
Don't give up on the monitor. If you are getting a clean signal from the JAMMA hook up for Tekken, then your monitor is OK. Its just a royal pain sometimes to get it working properly for MAME. I suspect a bad batch of breakout cables from Ultimarc is going around. When you get it working right, or even close you right, you'll be happy you worked it out. Playing games on the monitor on my JAMMA cab is awesome, especially with the 2.1 audio... SO COOL.
Things to double check:
Be sure to also set your desktop settings appropriately, 640x480, 60hz refresh, etc.
Be sure to read up on the MAME settings for the AVGA on the Ultimarc website, there is a guide on how to adjust your mame info file (very easy) to take advantage of the AVGA's hardware.
http://www.ultimarc.com/avgainst.html If you need it, I can share my MAME 106 file with you as a guide, but I don't think you'll need it, the instructions are really clear.
Let me know when you have tried these things... hopefully we can get you running. I TOTALLY feel your frustration though, I don't know much about this stuff and sometimes when I have a problem I'm at a loss for direction. Assure your wife that it'll work, it just might take a few more weeks!

W-L_A