@ composite out: it would be VERY cool if that would be possible, as e.g. in my opinion this is the coolest thing about the Raspberry Pi - they offer HDMI and Composite, which makes a lot of uses possible. And I frequently use both of them, depending on my use case. VGA is something "in between", and I feel like its relevance today is somehow questionable. But having HDMI and Composite is something like the combination of most modern interface (HDMI) together with lowest common denominator (Composite).
I think many people would like to use it on a modern TV, for those HDMI is perfect. And also many people would like to use it on old monitors like 1084S and so on. I personally use a Sony PVM. So you could please both crowds with that. Of course I don't mind having VGA as well - but I think having Composite would be more important.
Another thing that might be possible to consider would be S-Video. It offers better quality than Composite, but as far as I know, Composite is "just" both of the S-Video signals combined, so it shouldn't be hard to convert from S-Video to Composite. But as far as I know, converting from VGA to something else always requires dedicated (and powered) hardware.
Maybe S-Video is easier to do for you than Composite?
Of course in the end it's your decision what to use, and I understand that there might be technical reasons for leaving it out. But not being able to use the MEGA65 with old Commodore monitors etc might put off quite a few people, that's at least my assumption. So I would really really love to see Composite or S-Video on the final product :)