my act labs light gun works in mame with my 27" wellsgardner vga arcade monitor. if you havent already, theres a setting to turn on the light gun in mame...
in mame, click options, then default options, then click enable light gun input.
also, try using the gun in an exidy game like chiller or who dunit. those games are the ones i play and they work fine, ive tried playing some of the nintendo playchoice-10 light gun games and they didnt work correctly.
other than that i dont know what could be the problem.
-pocketz