As far as that kit is concerned, the Zippyy sticks are good sticks. About $9 a pop if bought seperately. And that looks like a Xin-Mo encoder, which I've used in the past reliably. Interesting that they've stolen the image of the Xin-Mo off of Groovy Game Gear's website and then watermarked over the top of it. Losers.
All in all, looks like you got a solid project on your hands that you'll have a lot of fun working on. Good on ya!