Kaillera builds of emulators just support multi-player on regular games over a network. What the OP is thinking of is linked arcade games where seperate players used their own controls, display etc. like racing games and the like. Whilst not exactly what you are hoping for, MAME can display multiple monitors within one desktop display, so in theory this could be used in certain games that shared a machine/interface/PCB but just broadcast to multiple monitors. Friz was looking into this to create a Playchoice cabinet, and I suggested using a graphics card that allowed desktop spanning, as you could then span the desktop so each display looks like it is being broadcast separately, though you may need a powerful PC to display things at good speed etc. if attempting this.
FWIW, Kaillera MAME is great, but you gotta get someone within decent PING distance to play the games well, and unfortunately most people just play Jap fightin g games on there, which is not ideal if like me you like co-op play but can't always find a willing second player. I did manage to get a 4-player Simpsons and Turtles game running about once, but it only takes one person to drop out and you have to quit the game.