I can save them out in whatever format, but that won't affect the look of the descreening much. The JPG setting was pretty high, so artifacting is nearly negligible, especially when compared to the filtering for the halftone printing. I was just curious what level of descreening I should go forward with...
I'm not sure if MAME will currently use anything but jpg for background art tho, although that could definitely be changed I'm sure...
I have to admit I didn't even know they were doing lossless LD images. That's pretty cool...