My act labs gun just showed up, and I have done some testing with the setup. As Richie said, the accuracy seems fine, and the precision is great (even at a distance).
Right now I am using the -yflip command, to flip my Y axis. I then convert this flipped image to a 'proper' image on a mirror. When the gun is 'looking' at the mirror, it registers a shot on the screen every time. Turn the gun right and left, and the shots track right and left. But, if you point the gun up and down, you get the reverse result. So there is an issue there.
I tried fooling around with the control options to fix it, but no dice. I did a few searches, and tried MAME32 based on some old posts, but it was still an issue.