Do you know this program called 98lite/98micro? -> http://www.litepc.com/ Have you tried it with ArcadeVGA and MAME? I don't know if it would be a good idea to install it for a dedicated computer running Windows in a MAME cabinet. I love the idea of a very small and fast copy of Windows with the minimun necessary stuff, but will it benefit MAME or will I have problems or lacks?
I use 98Lite. No problems with it with MAME. Don't use ArcadeVGA, but I don't think it would care.
I think it was more helpful when I was using a Pentium 200 MMX, but it is a good concept, and you have very little to lose.
In other words, use it to delete 90% of the stuff it will let you take out, and if you find you need Component X, you can always add it back in.