Here is a list of whats happening.
1. My controller has a mind of it's own.
The controller is an Avenue Pad 6 (http://gaming.wikia.com/wiki/NEC_Avenue_6_Pad)
and it has this cable that lets me connect it to the TG 16's controller port.
When I plug the controller directly into the controller port on the system, it does not work at all. However, I also acquired a Turbo Tap in the buy. When you plug the turbo tap into the the controller port, then plug the controller into the Tap, the controller works, but it acts on its own, and buttons randomly change function when I'm playing ninja spirit, the jump button may sometimes cause me to pause the game, while the attack button may switch weapons, or it may act normally. It's a dice roll really.
Worth noting, the controlled was REALLY flipping filthy when I got it, it did all of the same things I just described, but was a lot less responsive. It acts a lot better (i.e. more responsive) after I popped it open and took a spray can of contact and circuit board cleaner to it, however, the random button functionality still occurs almost constantly. I don't have any other controllers to test this with, sadly, and I've never seen any TG 16 stuff in my area before.
2. Weird video/graphics.
The video/graphics are glitchy sometimes, here are some pics. The following occur regardless of if I'm using RF or a set of custom AV cables I made myself.(http://www.cgquarterly.com/articles/tg16_cable.htm
Here is a shot from my TV playing Ninja Spirit (and here is video of it being played normally: http://www.youtube.com/watch?v=gx95IY2ZFk0 )

Sorry for the low quality iPhone pic, it's the best I could do with the resources at hand. I think the difference between what it should look like and what my system is putting out is pretty obvious though.
When I boot up Street Fighter 2 Champion Edition (through the converter) The title screen is supposed to be Blue with a big "Street Fighter" logo on it, with the Words "Champion Edition" below it in much smaller text, however, all I get is a black screen with the words "Champion Edition" where they normally would have been.
Okay, so that about sums up whats going on. Any advice? Is the console probably broken or might there be hope?