Assuming you are talking about the LCD Top Guns here. Mine just arrived today, so I can't answer definitively, but from what I remember of that massive thread on the boards here:
1) Yes, perfectly, just don't put a bezel over them
2) Works fine, but you lose the on-screen tracking icon (then again, real arcade games don't have those icons anyway)
3) Anytime the screen switches resolution-if you force the resolution so it never changes, then the only time you should need to recalibrate is if you make a significant change in your distance from the screen
4) All the reviews I've read on this board have been overwhelmingly positive-they're more of the "it works great and XXX would be nice to have as an additional feature" not "these things suck and are barely playable"