After having built an upright and cocktail, I personally found the upright easier 'cause you've got more room to work with.
My cocktail was tricker due to limited space, mounting all the computer stuff wherever it would fit, making better ventilation + extra fans, not to mention that my monitor chassis didn't match up with the bolts in the cab. I had to switch the whole frame of my monitor with one that would fit and line up.

The old pentium should be OK if you use an old build of the original MAME port (.36 final probably) under pure DOS.
If you're willing to drive to Franklin, MA, I'll get you my cab connection's phone number. (Its on my desk at work)
If you go the 4way route, check out the T-sticks from ultimarc.com, They've got a switch that flips easily to go from 4 to 8 way. (Then you can get some 1942 crankin'!) I've got them on mine.
As far a list of vertical games, I think you can use mame.exe to generate one. (I'm not sure how.) You could poke around on mame.dk too.
Good luck, welcome to the obsession...
Smack