The key setup in that program sucks.
The first thing to do is use the IPAC program winipac and make a profile for your IPAC that doesn't use the control or alt keys.
Then you have to set up in Blitz (shudder)...
I ended up setting everything to keys I wasn't going to use, then resetting them to the buttons I was going to use to avoid conflicts. That was the only way I could get it to go.
One thing to remember, the coin op didn't use the "pass left/right/center" buttons the game offers, so all you really need to set up is the stick and turbo/jump/pass/start buttons.
There's no real smoking gun to fixing this one, you just have to mess with it until you get it how you like it.
And you don't need the PS2 cable to program your IPAC, my programs just fine with the USB. This may sound odd, but try a different USB port. When I had a prramming issue, I switched USB ports, the IPAC reinstalled, and everything was fine! Just get the winipac program from ultimarc and you're on your way!