I'd go vertical for 3 reaons:
1) Based on your hardware being quite slow, you'll probably be playing a majority of older titles. The vast majority of these were vertical. I'd back this up with some research: come up with a rudementry list of playable games on that hardware, and see what the majority of titles are oriented at.
2) Based on your monitor size being quite small, if you mounted it horizontally, vertical games would be squashed even smaller. As such, again I'd go vertical.
3) A single-set of controllers is still applicable to many older vertical games (pacman, frogger, etc) in which 2 players took turns on a single set of controls.
Beyond all of that, which games do you prefer? A cabinet is useless to you if it only plays games you don't like.
