Many people in the community have complained that Partycade's Centipede 8-1 has terrible gameplay using the trackball and arcade buttons. I went and replaced all arcade buttons and trackball with better ones on mine and determined, while the trackball has somewhat improved in performance, the gameplay on Centipede, Millipede, Crystal Castles still has it's problems with the trackball.
I did however, play the game Super Breakout and the trackball controls on that are perfect. I believe the overall problem is with Arcade1Up. A firmware should be released to fix the trackball issues - better gameplay. The Partycade has been out for a year now and I doubt there will be a fix to this. I don't know.