Screen is a fixed frequency 640x480 VGA monitor (Nanao MS29-34). SDLMAME is happy enough splatting video up at this resolution, but when combined with a scanline effect looks horrendous - because it's applying the scanline effect BEFORE the image is prescaled with either yuv2x2 or yv12x2 (yuv2 and yv12 modes mess with colours too much).
That is a "feature by design". The yuv modes are intended for memory bandwidth impaired" systems. The whole rendering is done in software at the game's resolution; including all scanline effects. The whole window surface is then converted to yuv and uploaded.
What is the reason for using yuv? Are you on directfb or does your card not support OpenGL?