As for the shill bidding, that is the way reserves work in arcade auctions, you simply bid your own machine until it reaches a price you are comfortable with. Most of the machines don't have this happen, but the machines owned by auction employees (and auction employees ALWAYS own about 10 or 20 percent of the machines) simply aren't going for anything less than top dollar. At superauctions it is often buyer number 222 who is the employee buyer.
I have never personally bid on my own machines, but several of them I have come close on. There would be a lot less equipment if they didn't allow buy backs, as many people aren't going to risk bringing a choice piece of equipment only to have it stolen for almost nothing.
Game sabotage happens, but it is not as common as you would think, it actually tends to happen before the auction (the day before when people are dropping off games), it is more of a hazard for sellers than it is for buyers. But it often just backfires as the seller will show up the next day and either fix the game or buy it game.
Also, you can't walk into an auction expecting to get any particular item, because you will probably end up disappointed. You have got to just go in there and go with the flow. There usually are not enough Mortal Kombat or Konami 4 player cabinets to go around. All the mamers want them.
If you are looking for a Mame project then take careful note of the control panels of the machines, because a machine with a metal panel and controls you don't like is going to be a nightmare to redo. Converted Defenders are usually the easiest Mame conversion, they have a monitor shelf and the control panel is a flat piece of wood. In general if you are looking to mame then look for a pre-existing streetfighter layout or a control panel that is a flat piece of wood.
Also, the preview period is a good time to match up cabinets. Like it is a good time to sniff out the cabinets that play blind and the ones that boot up to garbage. A quick monitor swap between the blind game and the garbage game gets you a fully playable game, and another cabinet suitable for something.
I usually fill up my truck, but I bought nothing at the last auction. There were only a couple items I really wanted, one was a dedicated 2 slot neo with a one slot board (Football), it was really minty, but it sold before they got to my mame cabinet and I simply couldn't bid on any high dollar items like that until I knew how much I had to work with. The other was a Midway caberet with converted to trivia in really nice condition that booted to garbage. I bid $50, someone else got it at $75. I simply didn't want to be in $120 (with fees) for a Mini cabinet that I was still going to have to sink another $50-$75 into (I would have made it into vertical Jamma).