As you said, KeyWiz or GPWiz is probably better due to 32 dedicated inputs (for your application). You can do similar with an I-PAC with shifted inputs and a resistor capacitor circuit, but it's much more complicated.
Main advantage of the I-PAC is it can be config'd to use USB, it can flash the LED's (Caps and Num lock), and I think the programming software loads quicker if you reprogram it, also it uses EEPROM, so if you don't use the default codeset you don't have to re-program it on startup. If you do use the defualt codeset or your programs let you assign keys to use, this doesn't matter.
Can't advise you on MALA compatibility.
The KeyWiz emulates a keyboard, the GP-Wiz emulates a gamepad. For MAME, this doesn't matter much either way. Some emulators can't recognize gamepad keys above button 15, for example, so you end up using software like RBJoy with it to send keystrokes and the KeyWiz would be better. Some PC games only recognize gamepad inputs, which means you have a hard time using the KeyWiz with them (but there are software workarounds for that as well). Overall, I think the KeyWiz is likely to be more compatible, unless you know you want to load a lot of PC games on the cab.
More than you ever want to know here:
http://www.mameworld.net/tigerheli/encoder/index.htm