I have an Oscar Spinner, had a couple of issues on first install (mainly because I didn't follow the instructions close enough, nothing wrong with the spinner). Anyway, here are some thoughts based on what I didn't quite do right when installing it - I realize some of these are basic things, so don't think I am talking down to you, just stating some simple issues:
1) If you didn't already, try contacting Oscar Controls - I have found them to be very quick and responsive to questions
2) I assume you are, but connecting the spinner via USB is different than non-USB (I didn't use USB). Look on the Oscar site at the Installation directions (PDF document) and he explains the difference in the installation. You use a different wiring harness for the USB connection (I assume you have done this correctly, just pointing this out).
3) Which Mame ae you running? If it is the standard DOS based version, I would first try to get the spinner to work in Windows first. In windows the spinner should move the mouse left and right. Depending on your version of Windows, the mouse drivers in DOS may be different than the drivers in Windows. To ensure that the spinner is actually not defective, first try getting it to work in Windows. Once you get it to work there, if it still doesn't work in MAME then the issue could be your mouse driver (though if your trackball is working in Mame this may not be the issue). Download a new one and/or go into the mouse driver setup and (a) make sure it will also work in DOS (b) make sure your Mame.ini has the mouse setting to 1 (a setting of 0 will not load the mouse in MAME) (c) make sure mouse acceleration is turned off in the mouse setup.
3) In Mame, see what changing the analog setting in games does - press TAB and go into "Analog Settings" - usually the Speed settings should be on the lower side (Below 10) and the sensitivity settings on the higher side (over 100). That said, Arknoid needs specific settings to get it to work well (it should still work more than you are saying when not at these settings) - the speed should be 1 and the sensitivity around 150.
4) Make sure your wiring harness wires are secured in the little connector tab correctly. I had issues with this, since it didn't come pre-assembled, I had trouble connecting that little bugger.
5) The only other thing I can think of is make sure the optical sensors are actually situated so that the encoder wheel teeth are driectly in their path. Sometimes you can accidentally install the wfer board on the worng side of the metal mmounting bracket, so that the sensors are no longer "seeing" the encoder teeth correctly.
Good luck.
