Depending on the layout, player 3 and 4 sticks are totally usable. Here is how I did my CP to allow 2 player Smash TV on a 4 player control panel:
http://forum.arcadecontrols.com/index.php/topic,140777.0.htmlRotary? Are any of these games on your MUST PLAY list?
Ikari Warriors,Time Soldiers, Ikari III - The Rescue ,DownTown, Bermuda Triangle, Guerrilla War ,Gondomania, Victory Road ,Midnight Resistance, Heavy Barrel (US), SAR - Search And Rescue, Xybots
Caliber 50, Exterminator,TouchDown Fever, T.N.K. III
No? Then you don't need rotaries.
Dedicated 4 way? Your call. I am able to play 4way games on my 8way pretty well, but I dont play 4way games enough to justify a dedicated stick. You can always build a second control panel or cab. You don't need any extra interfaces, you can wire the 4 way and the 8 way to the same inputs on the IPAC , but both sticks are "live" if you do that.
OS selection......... I'd be inclined to advise you to go Win7.