One thing you should really figure out is whether you want it to sound “good” or you want it to sound authentic. I put the first descriptor in quotes because it’s obviously subjective, but what I’m saying is I think a half decent set of modern powered 2.1 PC speakers (i.e., L/R with subwoofer) is typically going to provide a higher-fidelity, fuller sound than the speakers built into most classic cabinets.
The thrust sound in Asteroids and the sound of Qix whipping about the screen both produce a hearty rumble from my cabinet’s subwoofer, which I happen to enjoy, despite the fact that I know the original hardware did not have a subwoofer and sounded quite different.
Another consideration for me is that I enjoy playing tunes on my cabinet; both as a standalone jukebox when friends are over playing darts or whatever, or as background music while I’m actually playing MAME. Having a mix of my tunes and the game sounds coming out of the speakers right in front of my face while playing a fun game is a really cool, immersive, and relaxing experience. Of course, this works better when you have a game without its own constantly-playing background music, but I digress. What I’m getting at is, my desire to play music on my cabinet made the 2.1 PC speaker system an obvious choice due to the totally decent sound for both games and music, and dead simple integration into my project (i.e., no need to shield the speakers, no need to buy/install an amplifier, etc.).
As for volume control, I’ve seen this question numerous times in my fairly short membership here. You’re going to get a bunch of different answers, all potentially valid depending on your specific situation, but my stock answer is don’t overthink it. My speaker system has the volume knob built into the left speaker, so I simply made removable speaker grilles (they attach with magnets). If I want to change the volume, I just remove the grille, turn the volume dial on the left speaker, and replace the grille. It takes 5 seconds to do and there’s no need for a volume dial cluttering up the look. I find that I rarely ever change the volume anyway—it’s largely been set-it-and-forget-it. After several months of heavy use for my cabinet, I’m very glad I didn’t waste a bunch of time trying to wire up some fancy external knob because, for me, it’s just not used enough to be worth it.