Thanks for the input everyone! I think that I'll give it a go with the laptop. I have just about everything that I need to build it except the wood. I know that it would be cheap to get a larger lcd, but I'd worry about feature creep. If I got the larger monitor, I'd be tempted to make a two player cp and get a different encoder, another joystick, and more buttons. Now that I have a 2 player, maybe I want a more powerful computer in there... You see how it goes
This build is basically just testing the water to see if it would get enough use to justify building a full size cabinet at some point.