Honzo,
First of all I personally feel good about your questions because I was there too. Though some would say "search the archives", the facts are that alot of what is written here is marred by other kind of information that it is hard to weed through the answer you want.
Time is something that alot of us don't have tons of. Yet you probably are looking to get into something while you have the energy. I can completely understand that!
1. Is it still necessary to include a dedicated 4 way joystick? or do ulitmarc's switchable joysticks (particularly the Magi-Stick plus) do a fine enough job to have replaced this idea?
In my opinion it is essential. For my 4-way I use the Magstick PLUS from Ultimarc. Restriction is key, and if you want to feel authentic and say not get stuck on a ladder in Donkey Kong, then go that way.
The 4-8 way feature is not only good for regular 8 way games but also good for Q-bert which in opinion doesn't need a physical restrictor. Congo Bongo I don't know about, but I can still play it with great success non restricted. Both of these games need the special diagonal movements.
Another option which won't give you Qbert(but of course you can still play it...just not inverted) is the Ultimarc J-Stick. This is another fantastic restricted stick. It is probably my favorite, even more so then the Magstick. The magsticks only real drawback to me is the short throw..but having it switchable from the top is what sold me. I don't like the way the Prodigy looks, so that cinched it.
2. Do most other 2 player and 4 player games use 8 way sticks? Should I buy more than just the one switchable joystick or will the one for first player (or if people still used dedicated 4 ways) suffice?
As with anything you can do what you want, but for me I like to keep each player on an even standing...so same stick on each one, and yes in my opinion they should be 8-way.
I for one do not like the Happs Perfect 360. It just doesn't feel right and while it may be more accurate I miss the microswitches. That is the only way for me.
So between Competition and Supers is where I go with this. Both I think are similar and it depends if you like an inverted Ice Cream cone feel or a round shorter stick. I hear lots of people like Supers for fighting games....but my choice....
The Happs Rotary Joysticks. I have never had a problem with the feel and they act very similar to Supers. I have never felt the supposed extra weight...and if it is there, it may actualy give a heavier feel which I like! Plus you get the added benefit of playing Rotary games! Overkill for some, but awesome for two people that like cooperating on Ikari Warriors!
3. If i only need the one 4 way switchable, what is the best 8 way that will look similar to the magi-stick?
If the Magstick is what you like, then I would go with the original to have a matching set. It is not my taste though for the two players. I don't know why, but I just prefer the J,T or Mag as the 4-way...just different feel.
Buttons:
1. How many should i include for player 1 and 2 to be most versitile? I hear 6 from some people and 7 from others.
or Eight if you want to go with a console becuase of the 4 shouldier pads. Some don't like this, but it is nice having the extra buttons to program with if you are using other things...like me going completely overkill with doing computer games too.
2. How many should i have for p3 and 4?
Player 3 and 4 don't need as many because it is really hard to get that many people going. But 4 seems to be enough..unless you have a psycho fighting game that has two on two combat!
But what about this idea. How about having dual joysticks like I have where you can get a 3rd person in between while not having a super large controller! I use the mouse buttongs as extra. The original SlikStik CO2 panel was a work of art if you ask me.
3. I want to use the buttons ultimarc has that are translucent with the led's...
a. Is ultimarc the only place to get these/only makers of them?
I don't like these buttons as much. They don't have a Happs feel. If lighting up is what you want Groovy Gamegear does them too.
b. Are they the same as your standard competition buttons? Anything i should know about their feel and such?
That is a big no from me. It is a much lighter feeling plastic...kind of like a toy transformer. Not bad quality...just different. I have two of them and they work great as coin buttons, but I just don't use them as the main ones.
Trackball and spinner:
1. I wanna use the trackball and spinner from ultimarc via their usb interfaces so i can use the ipac4, is this a good setup? (the trackball that mounts without a plate that is)
Sorry I can't help you with the trackball because I am eyeing them up myself! I have the older spintrak though and this is a fine spinner. Their new design is so well done. It makes me frickin' jealous. Get this spinner! It is great and it spins so smooth with high resolution.
2. I browsed the control panel database and noticed a lot of panels with "admin" buttons. What are these, which ones do i want to include, why?
Usually you use the "shift" function. I wouldn't go too crazy with making extra buttons for special functions. Just have combo shifts, and you can't go wrong. I put a couple of buttons on the back though and it works great that way for no accidental triggering.
Designing:
What would you recommend for designing the panel? and where can i find tips for designing a nicely functioning panel?
It really is alot of work. I would suggest you go with MAME Room where they can drill it for you. Though by all means try if you want, but getting those holes perfect without the right equipment is a pain.
PHEW!
I think thats about all i have to ask, If i find more questions, i'll post em. Thanks in advance!
No problem, hope I have helped.