There are 2 variants of M1 without the HD logo, the VA6 with similar hardware to earlier models, and the VA7 which is basicly a model 2 in a m1 shell. (and the stereo might actually be slightly worse as it has to go through the headphone amp) One difference witht he VA7 and early M2s is that you're sure to have a good video encoder (usually the Sony CXA1145 it seems), like many earlier model 1s and some early M2's, but many M2s have the "peice of shit" samsung video encoder, distorted and very blury.
Of course, those vertical lines you mention could have been due to the RF modulator as well if he had it hooked up that way rather than composite video. (most RF output on Genesis models seems rather poor, be it on board the model 1 or in the model 2 RF box, often quite noisy, compared to an NES, SNES, or even Atari 2600 my HD model 1 looks poor in RF, the sound is quite clear through RF though, mono only of course)
Very early model 1s (pre TmSS) also tend to have some "rainbow" noise in the composite output, not very noticable though. I couldn't notice it on mine, but I still don't have composite cables yet.
In any case, is your non HD M1 difinitely the VA7? Or could it be the VA6 with the indentation where the DE-9 exp port would go and the AV port closer to the edge.