The choice of buttons and layouts is basically personal opinion and comes down to what games you play and how you want to set them up.
I plan to use the layout below (I stole the design, BTW, but I like it). The buttons are layed out as
4 5 6
1 2 3
7
The pinball buttons are 8 and 9 (on a KeyWiz, but that's not why I'm using it).
I can play directional diamond game (C-pad in N64, Vanguard, SNES controller) using the
5
4 2
1
buttons on the layout, and the blue and green 3 and 6 buttons will be the blue and green button in N64.
But I chose this layout because I play mainly classic games, no fighters, and rarely 4-button Neo-Geo games. If I played otherwise, I would probably pick something different.
Should I have 6 or 7 buttons?, Should I use the layout in excellent Project Arcade book (3 above 3, with additional button below and left), should I use 4 above 3 right justified, or maybe 4 above 3 centrally justified. I have seen similar with references to Neo Geo for the top 4 and Capcom for the bottom 3
Again, depending on what games you like. I have read many posts about the different advantages, and all of them can work depending on what YOU want it for.
Also which button should be assigned to which key should it be Sw 1 to 4 at the top, 5 to 7 at the botton in numerical order, or in the PA book layout, should the botton left be button 1 or 7 (assuming use of IPac where Sw 1 would be LCtrl, Sw 2-LAlt, Sw3-space, Sw4 Lshift, Sw 5- Z, Sw 6-X, Sw 7-C.)
Keep in mind that this can be changed -
For example, I use
4 5 6
1 2 3
but for Street Figher, I obviously would re-map MAME so button 1 was L-Shift so I could play the game normally. I alternately could use
1 2 3
4 5 6
and re-map the classic games to use the lower buttons, if that was easier.
Also, the I-PAC key assignments work well for MAME but they could be re-assigned.
I also plan to put a button on the left hand and right hand vertical for pinball games. Which keypad should I use, should it duplicate one of the above, or should it be IPac sw 8 (V for player 1)
Well, as I said I have these as buttons 8 and 9, but that is b/c I had that many inputs available. (And so I can use them with PC games that require all the buttons) Rule of thumb is to consider two things:
1) Will you be using Pinball emulators that don't allow re-assignment of buttons. If so, you might want to double them up with the corresponding MAME buttons, or having special inputs for them. Otherwise, you would have to re-program the I-PAC before playing any of these (which is an option).
2) Generally, I don't recommend doubling up inputs until the encoder runs out of them. On my panel, I needed six buttons per player, two coin, two start, Pause, and Escape - so 26 inputs. I had six inputs remaining, so the Pinball flippers and the Neo-Geo Button got independent inputs. If I add rotary joysticks to the panels, the rotation switches will probably share inputs with the pinball flippers.