Disclaimer: I'm not an electrical engineer, my discipline is Computer Science, which is rudimentary in electrical engineering topics.
For standard copper wiring, I believe we're talking yards to introduce noticeable latency, perhaps more. Most cables for computer components are several feel long, I've had 9ft DVI cables without any noticeable latency issues. USB cables can also go several feet in length without adding any significant latency. Ethernet cables as well.
I think the choice of keyboard encoder and display are much more significant in determining latency, I wouldn't worry about the wire length.
If it helps any, I have a modular control panel. The Ethernet cable on the control side is ~10", and the wiring on the inside is another ~10", then I pass that through a 12" USB cable to a hub, and from there another 3ft cable to the hub built into my motherboard, without any noticeable delay at all. That's what? Almost 6ft of wire?
If you're worried about delay, things to consider that will introduce significant delay...
1. Display: A bad LCD is going to cause very noticeable delay. Choose carefully and wisely if you're going to use a LCD
2. Encoder: IIRC, PS2 is slightly faster than USB, because a PS2 generates an interrupt and USB is a polled system. From what I remember, PS2 inputs have half the latency of a USB. Depending on the USB input, the difference can be as high as 20ms-ish. Whether or not that's noticeable, I can't say, some people swear they can tell.
3. USB hub on the motherboard: The more devices plugged into it, the more potential you have to introduce latency if some signal is being sent. Place your USB encoder alone on a single port. I've seen people jack a ton of "noisy" devices into one hub and then wonder why they have latency.
4. Background programs: For the best possible experience, run the system with as little as humanly possible. Disable antivirus, system restore, and any/all other unnecessary background programs. Each of those programs can be running while you're gaming, and because of the way OS's work, they can slow your system down significantly.