Here is what NFG has to say (there are some points in the article where I found this that seem out of date, but this information is certain to be accurate, aside from the "unclear if there was ever more than the pack-in released," which I think is wrong):

Secret 15:
There was a PAL version of the TurboGrafx released. It looked the same as the US version, but it was grey instead of black, and received basically no support. The few games that were released (And it's actually unclear if there was ever more than the pack-in released) are the same as the US games - Card, code and packaging. Since the Hudson chipset didn't support PAL video the PAL-TG16 had another video encoder to convert RGB to PAL, and the system outputs AV instead of RF. It uses a connector very different from the AV port found on the CoreGrafx series.
If the code is the same, then it can use US cards. No reverse bit order or whatever the region lock from US to JPN is.

It seems to me the only thing that could be messed up is the video - he says there's an encoder to convert RGB to PAL, but doesn't mention any CPU clock speed kludge, which is great. It might be a different screen size and dropped frames, but the same speed.

That's a guess on my part, unfortunately. Somebody who knows about this system in more depth (that won't take much) will have to chime in!

I'd love to have a PAL TG-16, but of course I wouldn't do anything with it. I certainly wouldn't pay what the asking price is likely to be, heh.