I agree, sucks.
I used the LCD topgun and just don't like the distance and it worked "decent". I had to stand about 5' back on my 27" TV in my arcade.
I've been fighting/testing/blowing money on the Guncon2 type guns figuring that out lately. I've used both Smog Guncon2 driver and the Wingun driver (finally found the dang thing) and had mixed results. I have 2 official namco guns i was working with and i have 2 generic ones on the way ($22 shipped for both).
From what i have found out thus far, I have tested both Smog's Guncon2 driver and the Wingun Driver.
With the official Namco guns:
Smog's Guncon2 driver:
Doesn't track, has rolling x issue
Buttons work in windows, doesn't track well at all (rolling-x issue)
Buttons work in Mame .129
Wingun:
Tracks perfect
Works great in windows, buttons work and register
Buttons don't work in Mame .129
From what i've read the buttons will work in Mame .104, but you can't use 2 lightguns, since it won't track them seperately, so gun2 will shoot where gun1 is sometimes and gun1 where gun2 is. I tired 104 a little bit and the buttons registered but i couldn't get the gun to track.
I've also used advancemame without much farther luck.
I ordered some generic Yobo Guncon2 for $22 shipped that i'm hoping to test out this week.
I was considering the ACt Labs, but at $100/pop that just sucks.
I've used the LCD topgun that everyone raves about, but i personally don't like it. YOu have to stand 2-3 times the distance between the infared bars, so on my 27" tv in my arcade, i had to stand about 4-6 ft back before the guns would work, but the light bars are just ugly, there is no way around that.
I like the TV based lightguns because no lightbar and they work great. Just a matter of getting the right driver and mame version. Or something.