I am designing a new cab to be used with an LCD on the wall as well. I like the look of the new Silver Strike Bowling games, so I am going to pattern it after that. I had an arcade monitor for years, and I just got tired of messing with it. Now is a good time for LCDs. The shader effects in MAME let you simulate the look of an arcade monitor for the game itself while allowing it to be surrounded by high res artwork. It looks great. The MAME artwork team is also working on widescreen layouts, so it is just going to get better.
Another plus for me is portability. I plan to bring the cab in the living room for parties and hook it to the TV already there.
I bought a 32" TV for this project, and it is too small. The artwork takes up quite a bit of space, so I would recommend a minimum of 42". It is also probably a good idea to get the fastest TV you can afford.