No joke don't tell them that. 
It's important to get your layout right in the hard-wired sense first and then turn to software on special cases. Remember you can mass-redefine easily for mame, but not for other emulators.
I meant it as a joke, and still do. I left out a part to keep down the confusion. Here's that part:
The best reason to hardwire the physical button1 to the ipac port labeled button1, which is by default "left_ctrl", which is the default mame button1, is so you don't get confused when you hear or read the term/label "button1". Hence my "don't tell them.." joke.
OTOH, the Ipac, as most CP encoders, can be remapped for that all emu "mass-redefine".
For example, the mk64 encoder instructions say (paraphrased): hook up the wires any way to want (except for ground, and the rotary, shift button and LED exceptions if you use them), and then use the encoder software to reprogram the encoder to output what you want each button/direction to output.
Yes, it's more work to reprogram the ipac than not to, but it's not all that much more. [shrug]
True, it is easier and less confusing to just wire it the way it's labeled and ignore many of the encoders' features, and for us helpers to pretend that that's the only way. But there is more than one way, and sometimes are usefull (example: you can easily do a 3 player CP (up to 4 buttons each) with the ipac2 even though it's only labeled for 2 players).
Of course, if you only use mame, you can do as 2slk said. (With some problems with "hardcoded" inputs, however.)