Honestly, the book is a great $20 investment. I did most of my reading while multi-tasking on the toilet. (which coincidentally why my book is not up for resale.

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http://wiki.arcadecontrols.com/wiki/Main_PageThe wiki front page will give you a good idea of how you should proceed.
What you build really depends on what you want. I honestly do not recommend the actual Project Arcade cabinet, because it is so damn bulky and plays many games I am not a fan of.
You have to take this into consideration: Do you NEED to play every game ever invented on your cab? Do you want to re-created a specific gaming experience? Do you have space concerns? Do you have budget concerns?
You can spend as little as $100 on a fully functional cabinet, or as much as $3k on a bells and whistles cabinet. My current Mame machine is a $50 Narc cabinet, a $20 speaker set, a $20 encoder, and a repurposed pc and monitor. My work was very minimal - I had it done in a weekend.
I also built a desktop control panel that I use frequently.
The bottom line is this: there is not a cut and dry method to suit everyone. you have to sit down and think about you want in your machine.
Good luck whatever you decide to do.