I chose MDF for my modular panels so I could build them myself. I really wanted metal panels, but the cost was too high...or so I thought. If I count the money I have spent on woodworking tools over the years, I think it might have been cheaper to have metal panels made. The MDF panels have held up pretty well though. I have only dropped one and dinged a corner.
When you are new to this, you read about all of the games that are hard to play in mame because of special controls. That led a lot of us to try to make these games playable. I have ls-30 joysticks that have been sitting in a box for yeas now. I have everything I need to play ikari Warriors, accept for the desire to play it enough to actually make the panels.
Good decisions I made:
I started with a simple 2 player plus trackball and spinner setup, and I am glad I did. I think it is good to find out what you are missing before taking on a huge project like a frankenpanel, modular, ar swappable panel that you may not want. If you design it so it is easy to swap panels, you will be that much ahead of the game if you want to add more later. Get a feel for what changes YOU will need before you follow all of the advise here.
I have a bunch of panels with all kinds of cool controls, and I have the controls to make about 30 more. The best thing is that I am not required to use them all of the time, or even to finish the rest of them. I have choices, and I like that.
95% of the time, My panel has a wico 4-way and 2 buttons installed. A lot of the games I like can be played with that, and I wouldn't want to play them with an 8-way or even a 4-way in a bad position on the panel.
Knowing that I am about a minute away from playing Tron or Centipede, or Gyruss, or whatever, with the correct controls is really a nice feeling. I only want to play Tron a few times a year. I would hate to have to try to play around that joystick the rest of the year.
Suggestion:
A lot of people worry about designing their cabs so everyone can walk up to it and play it using everything it has to offer. Why? Think of how many hours we have put into this; we still have a hard time taking advantage of everything these cabs can do. Your friends that don't know or care about this stuff will not know what to do with it. You are simply giving them too many options to deal with. They will not actually play the games, they will just demo and move on to the next game. Remember back to when you were working with your complete gamelist - there are just too many choices to settle down and play a game. That is what they will feel every time.
In the years I have had my modular panel, only 2 people have ever wanted to change them. Others may want me to change them, but are not interested enough to learn the easy steps to do it. I think this is probably the reason most of may panels are still in great shape.

If there are people over, I will do 1 or 2 changes per night max. Non arcade enthusiasts just don't like these games like we do, and no amount of choices will change that, so I prefer to spend the time playing games. I have the wii and 360 to keep people occupied. At one point I had 14 games, the mame cab, and a pinball machine going. After a couple of hours, only me and maybe 1 or 2 people are still playing. It would be different if a group of us got together, but that is rare at best. And if it did happen, the guests would have an idea what to do, or want to learn.
Build it for you and no one else. IF you build it for someone else, they will lose interest. Then you will be stuck with something you don't want. If you build it for you, and family or friends care enough to want something different, help them build their own.