I'm a relative newbie as well and went through exactly what you seem to be going through right now. I just started building my 1st panel this evening. For what it's worth, my joystick and encoding concerns were exactly the same as yours.
After all my research and flip-flopping, I finally decided to go with the sticks (j-stick) available from Ulitmarc (site mentioned below). These sticks seem to offer the best 8/4 way option where ease of changeover is concerned and the widest amount of versatility for the types of games that you mention.
As for the feel, some people say this or that stick feels better for this or that type of game for various personal reasons. I figure it's all a matter of preference and though a certain stick may not be 100% ideal for a given game, one could get used to it. After all, any stick has to be better than a keyboard. I can't foresee differences in sticks having such a huge impact on game play as to make it unpleasant or simply not worth it. After all, I've played games in arcades where the original sticks were replaced with all sorts of different sticks. They felt different sure, but it never made it not worth the 25 cents.
As for encoding, I went with the I-PAC and OPTI-PAC, available from Ultimarc. This encoder was the clear preference winner in a recent poll in this very forum. It seems to offer the best price/feature benefits and offers the best ease of use for those who are not very good with this sort of tinkering (like myself!).
As for where to buy, in my personal experience I have found Ultimarc, Oscar Controls and Bob Roberts to be highly professional, courteous and helpful. Purchase from them with confidence.
So I hope this has helped you out a bit. Best of luck.