I am building a mame cabinet for my house, and I am currently
scavenging the web for parts.  I've decided that I would much rather
output to a 27" television than an equally priced (but smaller) CRT PC
monitor.  Obviously, older used televisions (with only a coax input)
are much cheaper than never ones (with an s-video input).  My question
is, how much signal loss actually occurs when a signal is converted
from s-video to coax, and if it is noticable, (keep in mind i will be
standing about a foot and a half away from the screen) will it be
acceptable? (most arcade games don't run any higher than like 250x250
or something like that)

There will be no problems with signal level,its enough but the problem
wiill be with colours.When signal is coded/decoded in PAL  or SECAM
format some colour information will be lost and the blue and red
colours may  be shifted(especially on a big screen).The same with AV
input/output.
But if you need B&W image it will be OK .Or ,you can connect using
SCART(if you have) w/o signal and quality loss.
Anyway I think the monitor is better because it supports better
quality and higher regeneration frequency.TV is made for watching from
distance from 3 to 5
 diagonal sizes.