This is true, i'll take Ninja Gaiden NTSC for example:
There are games in both regions that incorporate the code to run in the other region, when you use a debug bios based one (xecuter, evox, etc...) you allow the game to run using the code implemented for the other region, so you can play NTSC games on a PAL running console and viceversa, but some times this code to run in the other region is not finished or complete, and the movies are not encoded at the correct framerate to stay synchronized to the TV standard of the other region, the results of this may vary.
Some games shows slowdowns, other serious tearing effects, and other simply doesn't work.
In my example, Ninja Gaiden NTSC running on PAL console, the result is that the game forces the console to output 50Hz, i think because it hasn't implemented the code for PAL60, the gameplay is a little slower than normal, the movies are jerky and lost sync with gamepad rumble, some subtitles in movies are skipped too.
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To clarify thinks about different cables setups:
Composite Video: three color signals + TV sync signal in the same cable and GND (2 cables).
S-Video: Luminance and chrominance, both with embeded TV sync signal, splitted into two cables with their corresponding GND (4 cables)
RGB (Scart or RCA's): Three independant color signals with sync and their corresponding GND (6 cables)
RGB gives the best quality as it prevents "color bleeding" and keeps the original quality of the colors, it is also cheap and easy to build for everyone, and the most of TV's support this standard. S-Video is the next in the ranking, suffers from a little "color bleeding" but has good contrast and color brightness, is the most difficult to build and is the less supported by TV systems. Composite Video is the worst in quality terms, serious "color bleeding" and standard brightness/contrast quality, but it is the cheapest and the most easy to implement.
The quality you may experience with your TV may be contradictory of what i have said, this is because it depends of how your tv is able to manage the different signals, for example, the TV i'm using to watch my xbox doesn't support S-Video signal, does support RGB but set the brightness too high forcing me to put the brightness down in the TV config. Composite behaves normal, so it may appear that composite gives better quality on this TV, but once you have set up the correct brigtness, you realize that RGB gives much better quality (but all the other channels look too dark), in the case of my other three small TV's, only one of them supports S-Video signal, and all of them supports RGB and composite without any kind of glitch (but they are small
)
Don't be stupid, do not pay more than $15 for a RGB cable they are not affected in any noticeabily way by poor quality materials (except in extreme cases) as they share the same principles of composite video signal, even they are less affected by long distances than composite.
Hope this will help you.
Cheers
