If you are doing a whole cabinet then I wouldn't hobble the project down to 3 inputs just to save $25 on an encoder.
No, you're right, and it looks like just getting the encoder will save some headache. This is to be the next project for the 'Arcade Fired-Up'
course I'm teaching, and we are on a fixed $300 budget. The pc and monitor are already secured, and I have a bit of scrap wood (not enough for full sides of even a lowboy/cabaret), but trackball setups (esp. the usb ones that don't need mounting plates) are not cheap and when you throw in buttons, switches, wiring, t-molding, paint/stain, screws, marquee retainers, and especially plexi, glass, and printed artwork that $300 goes fast.
Can anyone else comment on PL1's post? I need to do some research there.