Ultimarc, the makers of the IPAC are located in the UK.
Hacking a keyboard, while certainly cheaper isn't anything like easier, it's a royal pain. Attaching wires to an IPAC (I assume the Keywiz is similar, but I've not used one of those) is super easy. Also if you're making a controller with more than a few inputs you'll probably get ghosting issues. I'm sure someone who understands this phenomenon better than I do will be along shortly to explain it. To put it simply when you hit more than one or two keys at once it can sometimes confuse the keyboard into sending the wrong signal. Like I said, I don't understand it, but I have experienced it and it stinks. You don't get this problem with an encoder.
Also the PS2 IPAC and the USB IPAC are the same, you just get the cable for whichever port you need.
-S