IMHO, LCD monitors are fine, although being widescreen you do lose some real estate on the left and right of the monitor. But on the other hand, if you went the extra mile and made it rotatable, a rotated widescreen monitor is great for vertical oriented games.
Just one caveat, I'd go with an LCD computer monitor over a TV. Reason is input lag (not to be confused with refresh rate); some TVs have really bad input lag (50-60ms) which can affect gameplay especially those requiring precise, rapid movements as most arcade games do.
Computer monitors have far less input lag. I measured my two LCD screens at around 10 ms apiece. Perfect for any gaming.