Couple comments and some points I'm going to disagree with...
There's nothing inherently wrong with Vista. What you DO want is a 64-bit OS, and the realities of driver availability mean XP is not a viable option for 64-bit. If I were building a system now, yeah, I'd use Win 7, but that wasn't out when I built my cab and thus I'm running Vista; I've yet to see any reason to upgrade. Point being if you have access to a Vista license, don't feel compelled to spend money on Win 7.
As for the system itself...if you can afford it, you are much better off with a Core 2 Duo instead of an older P4. An E8400/8500/8600 will run a lot of games in MAME (notably the Playstation-based games like Tekken 3) that the P4 will not. This stuff was in mainstream Dell business PCs 3-4 years ago, so there's no shortage of them refurbished. Look for a Dell OptiPlex 780 if you want to go that route.
I also disagree about avoiding flat-panels. Without starting a holy war, it really comes down to if you want the most authentic graphic experience possible or are willing to trade-off a little of that for much greater convenience and flexibility. I suppose I'm not a purist, but using a MAME filter my LCD looks authentic enough that I've never once regretted going with it instead of a CRT.
In any event, good luck with your project. There's a ton of info on these boards, and a lot of experienced (much more than I am) people.
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