Sounds like you're falling into the race car / road car gap here....
TPS based systems are generally used on cars that can't use a MAP system because the signal is too noisy. That generaly means lumpy cams etc. For these engines idle quality isn't an issue, so they don't use idle bypass valves.
You want a road car based setup, but are trying to get around a noisy/aggressive MAP signal using TPS, which limits your options.
Things to try
1) Use the ignition based idle controller. The IAC should only really be used for quite slow corrections, or to copensate for additional loads (like friction when cold or alternator loads). The ignition path should then do the fast work to stabilise the idle and react to changes in load (before the air path has a chance to). Hopefully the idle igntion will become 'proper' PID controlled at some point, with error compensated PID terms tables (are you listening Rob?
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2) Try fitting a damper in the signal line to the MAP sensor - something like a 0.5mm restrictor hole. This might calm the signal down enough to use it (or it mihth not)
Regarding you other point about shunt on fuel cut/reinstatement, check that you have blended out the VE table to the minimum pulsewidth (you'll need to investigate what that is) and also blend away the ignition at the low load sites (you may need to play with the load sites to get this right). This will smooth the torque away as you tip out and enter fuel cut, hence reducing the torque step between fuel on and fuel cut. You will still get some step since you don't have control of the throttle an ignition in the same way as you do on a modern torque based system, but you should be able to improve things.
Oh, and what's SD?
