I guess I could of found some of my answers by doing a better search of the board. (Yes, I'm answering my own post
)
It's a good practice to do so if you find some answers to your questions; then other people get to share in the knowledge.
This thread discuss the analog vs digital thing. thread I guess the short answer here is that it depends on the game. Analog covers them all, but in some games it doesn't work well.
I'd say analog covers it all, but on digital games it's a little hard to tell what angle mame will treat as the On/Off spot. And with digital arcade sticks, you know that On/Off angle.
And as fas as supporting multiple joysticks, this is from the MAME FAQ:
"Multiple joysticks are supported just fine, though", however it also mentions later that "there can be only one analog joystick device per MAME analog input port, but many digital.", but I think this refering to splitting up axes from different joystick to be used as one control or vice-versa. "Fortunately, there is a project called Analog+ that aims to remove these limitations".
So it appears that if I want to use two analog joysticks to play tank games like battlezone, I'd probably need to use the Analog+ version of MAME.
Um, not quite. Mame has updated a
little since then, and has accepted most of the Analog+ joystick code. However, I can't word the FAQ much better than it already is.

First: there are different analog/digital points to address: device type, game type, and mame type.
(mame type) In mame, there are only four analog axes per player (and only two, X & Y, are really used). Mame has a limit of four players, thus a max of 16 mame type analog axes. For each axis, mame will treat only one input as analog (the first joystick axis, a device type, mapped to that input); all other inputs mapped to that axis will be seen as digital inputs.
Mame's digital joystick inputs doesn't have the limit of 4 axes per player.(device type) Official Mame can see 4 joystick devices. DirectX has a limit of 8 axes per device; mame can see all of these axes. (The gameport has a limit of 4 analog axes per port, unless the device uses a driver and non-gameport standard signaling.) So mame can see up to 32 axes. Any number of these axes could be digital, and the remaining analog. Mame can use any one of those analog axes to control any of mame's 16 analog axes, and/or the more numerous digital axes.
(game type) The game may or may not have analog inputs. Some games can have more than mame's max analog axes per player, such as hard drivin' (5). Mame's game drivers cheat by using mame's player 2 and player 3 analog axes to fill in the needed axes for the game's single player.
Okay, examples:
Assault: original game had 2 joystick, for 4 digital axes. Both the mame thpe and the game type are digital, so you can use 2 analog (device type) joysticks for the left and right game sticks no problem.
Spy Hunter: original game had analog wheel and analog pedal = 2 analog axes. Usually you want to play with the wheel & pedal, but sometimes you want to use a joystick when you're too lazy to pull out the wheel&pedal. If you mapped the joystick and the wheel & pedal set to the game's analog inputs, mame will treat only one of the devices per axis as an analog input.
See, I try to do a short explaination and I write a book.

If anyone can do a better job of explaining this, it would be great to submit it to update the FAQ.
Short: as far as analog joysticks, Mame and MameAnalog+ are pretty much the same, and neither have the limit you seem to worry about here. The only advantage Analog+ has with joysticks ATM is mame has a limit of 4 joystick devices, Analog+'s limit is 8 devices.