You get an error when you compile. The offending line in texMate.py is
stat = os.system('type '+engine+' > /dev/null')
which doesn't seem particularly useful anyway, but could easily be fixed (and I have in my copy!) by doing something like:
stat = os.system('type '+ engine.split()[0] +' > /dev/null')
A more meta question is whether this hack is a good idea, since it defeats the kpsewhich checks in files included in ./Macros. I use it mostly because the other place to put all this would be in a TM project, making it hard to collaborate with TeXShop users. Does anybody have a better idea?
^L