from the sticky:
What is a gate? What should I know about them? 
A gate, or restrictor plate, is a part of arcade sticks that limit the movement of the stick. These are a removable part featured on most Japanese sticks. They come in different shapes but not all shapes are available for all brands of sticks. The most common shapes are square, octagon, and circle.
The Sanwa JLF–which comes standard in the Madcatz TE–uses a square gate as its default gate. It can be switched out with a Sanwa produced octagonal gate, and recently Toodles released a custom made circular gate as well. Many new users are initially turned-off by the feel of a square gate and choose to switch them out of an octagonal or circular one.
Personally, if you’re using a TE, I recommend that you just stick with the stock square gate. After learning to adjust to them, most people swear by them. In general, if you’re already dealing with arcade parts, you’re better off taking time to practice than taking time to modify. Of course, it’s still a matter of preference, so ultimately you should use what you feel most comfortable with.