OK ... finally ... after many weeks of trial and turmoil (both with the cabinet and with real life work), I have finally finished my cabinet ... WITHOUT COMPONENT VIDEO.
I purchased the Adapter from ATI ($29 + $15 s/h = $44 yikes!!) and have had nothing but problems with the stupid thing. I have also written 3 e-mails to ATI asking them for help on the situation. Unfortunately they have yet to respond.
My video card is a Sapphire "Powered by" Radeon 8500LE.
My television is a 27" JVC-AV27230.
MY OS is WinXP Pro
The TV has both component and s-video connections and is all in all a pretty good tv for the money. I highly recommend it.
I have also read about the "powered by" Radeon's (that the video-out on them is inferior to that of the "built by" cards), but I must say that I am VERY satisfied with the s-video out on this card. No complaints here. The VGA and even the DVI-D work great too.
However, when I hook up the HDTV component video adapter to this card and connect it to the JVC, everything goes haywire. First off, I have been unable to get any color to be output from the adapter to the JVC. However, I hook up the JVC to my DVD player at home with the same component cables and get a color signal. So, I decided to connect the HDTV component adapter to a Dell projector with a "DVI-I to component" cable, and voila ... I get color. When I asked Sapphire about this phenomenon, they say I must be using PAL for the TV output. The Catalyst software doesn't support the PAL/NTSC distinction for YPrPb output, so I decided to ask ATI about this. It has been over two weeks with no response.
The difference between S-video and Component ouput on the Dell projector was highly noticeable. Component was MUCH better. However, there was still another problem with COMPONENT output from the HDTV adapter which I don't think I can ever get over unless they improve the Catalyst software. It seems that the adapter overscans the images to the TV by about 5%. This is a known issue and documented on the ATI website. I didn't think it would make that much of a difference .... it does. Just to give you an idea about how much of the screen is cutoff with this overscan ... the mouse completely disappears from view in each direction. It was nearly impossible for me to play any games with the command line mame because too much of the playing area was being cutoff. (I know I probably could use another version of Mame to display the game in its proper dimensions, but I don't want to do all this configuration if I don't have to.)
So, that's it. My guess is the output signal from the HDTV adapter only works on TV's that truly support HDTV not just the YPrPb inputs like the JVC I have. I have spent a lot of time researching this subject and just can't find any explanation as to why I can get color on the projector but not on the TV. ATI has not been one bit of help. The overscanning of the image is a huge pain anyway. I am just going to stick with s-video for now, and keep my $44 dongle handy just in case one of these days someone can help me get this thing to work.
For anyone else contemplating this route, I suggest to hold off for now. Even if you can get color out to your tv from the adapter, you will have to do a lot of customization to make the games playable on your arcade, and if you are going to do that, might as well go the route of a true arcade monitor.
So, that is my 2 cents. Hope it is helpful.