I went with mostly a good 5.1 computer speaker setup, but added a couple of small car speakers to the system - and it sounds great. I love sound and have a huge sound system in my house (2 of them actually in different rooms). I was going to go crazy and do that with the arcade, but after listening to a good PC sound system realized that was more than enough. With the volume just at 50% it is loud enough to hear the Asteroids heart pounding sound on the top floor of my house from my basement.
I have 3 speakers (left/right/center) up on top under the marquee, where arcade speakers normally go. I have 2 speakers below the screen, above the control panel. I have a subwoofer in the bottom, under the coin slot. I also attached two speakers behind me to give a good surround sound effect (I have two skinny black poles going from the top of the cab back about 4 feet to which I have the 2 spoeakers attached). I don't have my website up to date yet, so you can't see what the heck I did yet...
Bottom line, a good PC speaker setup is working very well to me. I know some guys have some serious systems in their machines, which is cool too, but for me the PC speaker setup is more than perfect.