If that picture is accurate, the China clone also only has a 90USB162 on it whereas the "official" PJRC model has a mega32U4, so double the flash. Fitting a fully featured USB stack in 16k can be a challenge (though it's perfectly doable - you can cram one into about 2k if you really want to), but 32k provides plenty of room. Atmel AVRs, though not these models, at least that I'm aware of, have been subject to counterfeit recently, so hopefully the PJRC "official" one will have real chips. Who knows with the China knockoff.
As for use, sure it's useful for arcade related stuff. It's basically just a breakout board including oscillator and USB port for the chip contained on it. For arcade related stuff, you'll probably be using it for inputs and light outputs. AVRs are pretty powerful little MCUs. You can use LUFA to do the USB side, or Atmel has about a bazillion different stacks in varying states of (dis)repair. Be aware that you'll have to do some somewhat serious programming on this. If you're not comfortable in C/C++, steer clear.