I'm in the process of spec-ing something like this out, because I've come to the realization that I don't have the space or money req for a full cab.
Instead of a full cab I'm gonna put together a small computer as a MAME console basically. Have it hook up to the TV and use game pads as controllers. I plan on using front USB ports like joystick ports, but I can throw a hub on there for 4 player, or a light gun, or even a trackball.
For my money, you can't beat the
VIA EPIA M9000. 17cm x 17cm, 933mhz, and quality sound and video outs onboard. Add a small PSU and a quiet HD and your in business. I'm gonna fab up a slick acrylic case for it and load it up like any other MAME computer.
That's my plan anyway. Unfortunately, my monitor blew out over the weekend, so these plans are on hold for a couple months.