Also would two Ipac's be better than one Ipac4.
My thought was that I-pac #1 would then run directly to cab one only.
I-pac #2 would run to the KVM switch, and then get sent to either Cab 1 for 4-P games, or cab 2 for 2-P games.
The KVM switch would send the video for the correct computer at the same time as the control switch is made.
With a single I-pac 4, you'd have to:
1) Figure out a way to send the inputs from it to TWO computers simultaneously to play separate 2-P games on each cab.
NOTE: I'm not even sure that CAN be done.2) Have a separate encoder in Cab 2 anyway, and switch the inputs from that encoder to the I-pac 4 for 4-P games only via a ground wire cut-off.
Also any other info on the "hot key" you mentioned to activate the switchover...I am not familiar with them? 
Most (possibly ALL, I'm not sure) KVM switches have a hotkey command on the keyboard that tells them to switch between computers.
The basic operation of them is that you have ONE keyboard, ONE mouse, and ONE monitor, but TWO computers.
When the hotkey command is pressed, it tells the switch to send any data from this point on to THAT computer.
Pressing the combination again tells it to send everything to THIS computer.
If you multi-wired a single switch (ala the Shazaam key type diode setup), so that it performed that key combo, the cab would automatically switch the video and controls from one computer to the other with each press of that button.