So much strife over how this emulator outputs. As has been mentioned, the Dreamcast is really a 480i/480p machine. The only games which we know use 240p are Capcom and SNK fighters, and for a few of those, it must be toggled on, and only works over composite (3rd Strike is known to force 480p over VGA at all times, no exceptions).
It's also important to realize the Genesis and Mega Drive used a few different resolutions depending on both region and conditions. - 256x224 (32Hx28V), 320x224 (40Hx28V), 256x240 (32Hx30V, PAL only), 320x240 (40Hx30V, PAL only)
- Interlace mode 1 provides no increase in resolution, but still generates a true interlaced signal
- Interlace mode 2 can provide double the vertical resolution (i.e. 320×448 for NTSC, 320x480 for PAL). Used in Sonic 2 for two-player split screen
Since this emulator also provides a number of PAL games included, 480i/p is basically a requirement to ensure all games scale correctly for your display. So unless you want to sacrifice a handful of those games for that 240p, the option just isn't in the cards. This is up to TapamN if he wants to spend any time on that. As far as I see it, the emulator performs great already, and at least on VGA, looks stunning at all times. My Extron can't generate scanlines, but I'm really not concerned about it. The main benefit is that this emulator performs far better than any previous efforts on the Dreamcast, be it from Sega themselves, or the community.