I plan on having "ARCADE" spelled out vertically in TRON Font on both sides of the cabinet
I have never understood why so many people feel this urge to label their cab with the word "arcade" or use a project name ending in "-cade".
When was the last time you looked at a toaster emblazoned with the word "toaster" or a refrigerator with the word "fridge" plastered all over it?
It just seems like an insult to the viewer's intelligence that they need to be told what the big box with the screen, sticks, and buttons is.
Additionally, if someone is too stupid to know what a cab is, do you
really want them touching your build?

[/rant]
Not saying you
shouldn't use the word "arcade" on the sideart, just asking you to be sure that's actually what you want instead of just keeping a placeholder name that you might not have thought through.
(black backround, white lettering, possibly slits cut into the letters to allow light blue led's to shine through.
This part sounds cool. You might want to use the material used for marquees for the backlit portion instead of cutting it up.
Any ideas on which is the best way to put joys and buttons on this panel?
The main mistake that people seem to make is buttons/joysticks that cover the face -- especially the eyes.
Try to make this like the Reese's Peanut Butter Cup ad, "Two great tastes that taste great together."
The background art may look perfect by itself and the joystick/button layout may look perfect, but if the joystick ends up located on the groin area of one of the characters, I suspect you'll be . . . unthrilled.
If you have layers in your editing software, add two layers. If not, change software.
On one layer, you can place your favorite layout from
Slagcoin.
On the next layer up, mark the centers of the buttons/joys and add halos/text/whatever else.
Once you have the second layer looking good and properly aligned, you can delete the Slagcoin layer.
Once you have the desired placement and spacing for the joy/button layout, you can adjust the background art so it compliments and works with the layout.
Scott