Model 2 Emulator is great for LAN games. In Daytona USA you'll get slightly flickery AI cars and in Sega Rally your actual car will flicker, but they are fully playable and I don't think it really detracts from the enjoyment too much. Motor Raid, Manx TT and Indy 500 are also playable over LAN. I've not really had much experience with the first two in Multiplayer, other than checking the LAN actually works. Indy 500 is a bit temperamental and will very easily get a network error if you start getting even the tiniest hint of lag between the two machines.
I believe there's also a version of MAME now that lets you link-up Virtua Formula (aka multiplayer Virtua Racing), but I've not had any experience with it. Multiplayer is going to feature in a future build of Supermodel at some point, there is a WIP version of it that already been compiled, but it's not publicly available yet. The old PC version of Sega Rally 2 also supports LAN, but for some reason I've never been able to get it working though.
Edit: the linkable version of MAME is Cabmame. More info at the link below:
http://forum.arcadecontrols.com/index.php?topic=130136.0I must admit, I hadn't previously been too bothered about trying to get this working, but reading through the thread piqued my curiosity. Thanks to the nice clear set-up instructions from dgame it was actually quite simple. One thing that's a bit weird though is that it looks like this automatically throttles the game to speed it up a bit, the music definitely sounds sped up.
Double Edit: Actually, finding that thread has been useful for me, as reading through it I've been able to figure out how to create an .ini file in UME so I can get it to start accepting mouse commands for lightgun games. Excellent!