The UltraHDMI doesn’t like those resolution switches. According to the posts on assemblergames, there are plenty of artefacts when the resolution switches.
If you’re quoting reports from assemblergames, I don’t think I agree with that wording. The UltraHDMI handles resolution switches just fine, and the only artifacting I can think of would be combing artifacts from the basic (but better than OSSC, in my opinion) deinterlacing of 480i/576i content. If the UltraHDMI had the option for good deinterlacing of 480i/576i, even at the expense of a frame of processing lag, I don’t think there would be any complaints.
Option #2 is going to be very hard to come by, because most flatscreens lack S-Video, and those that still have composite and/or YPbPr lack 240p support. If you’re lucky enough to have a TV with YPbPr input that understands 240p, you could very easily get a Koryuu (when they come out) and use S-Video from the N64; the display should handle resolution switches just fine, and it should properly deinterlace 480i/576i; but it does require the display to handle all of that. It’s also getting harder and harder to find TVs that still have YPbPr inputs, let alone ones that will do 240p over YPbPr.
Regarding Option #3, if you’re mainly playing games that do 240p<->480i transitions caused by having the expansion pak installed, I would recommend just switching back to the jump pak. If you no longer have one, they’re going to be dirt cheap, especially compared to a cheat device.
I think we still need a device like the UltraHDMI that could continually output at a preset resolution and framerate, perform good deinterlacing when needed, and then scale and framerate-convert that to the preset resolution and framerate. Yes, it would add lag, but it would look damn good, and be the best solution next to using a CRT (which is becoming increasingly difficult, since good examples are getting more expensive, and repair shops don’t want to touch them). The Framemeister is close, but, for whatever reason, will not continually output at a preset resolution, and thus it suffers the same HDMI blackouts as the RT2X and OSSC.