One possibility is having four buttons for players three and four, and orienting them like a diamond (45 degree angled square) This works well if you choose an x++x layout.
Since I have a trackball, I chose this. My CP was already 48", so having P3&4 as + would've been cramming things.
Using what I've done myself opens up options. Player one can use the P1 and P2 sticks like normal, or both players can work off P3 and P4, using the joysticks and buttons. The buttons work as the shoot joystick. Having them oriented as mentioned above allows easy cardinal direction shooting with one button, and for diagonals, pressing two of the buttons at the same time.
Sure, it's not true to the original, but you work with what ya got, and that's what I did, and it works swell.
Admittedly, I will at times inadvertently press opposite buttons (left and right for example) which results in no shooting, but you'll realize it within a second or two, and adjust your fingers accordingly. It's not like you're tossing quarters into the thing, so no big whoop for me.
Plus I'm not a "veteran" of that particular game, so playing with buttons instead of a second joystick doesn't make all that much of a difference to me. A true SmashTV fanatic wouldn't settle for anything less than the four ++++ setup. If it is one of your FAVORITE games, I'd go that route. Or, if you can somehow squeeze two extra 8ways in there, go that route, but with a trackball, that might not be possible.
Or you can just screw all that, and make two CPs. One for smash tv (and other games probably) with the two players/four joys, and another CP with a standard four player setup. The trackball could be put on either, I would think. Really you're only talking 4 extra joysticks, some buttons, wood, and overlay graphics (if applicable.) Those would be the higher cost items for such an endeavor.
Lots to consider.