No currently supported version of MySQL allows TYPE=.
Version 4.1 (remember: it is *NOT* supported) allowed *either* TYPE= or ENGINE=.
I don't know when ENGINE= was first allowed, but apparently it was even before 4.1.
Given that it's unlikely that all of your queries are going to work with any version older than 5.1, I would think there is no point in worrying about TYPE=. After all, there are SO MANY features supported in 5.x compared to earlier versions that it would be hard to be backward compatible unless all your queries are really really simplistic.
An optimist sees the glass as half full.
A pessimist sees the glass as half empty.
A realist drinks it no matter how much there is.