Going over your points/questions:
There is actually quite a few problems with the parallel to USB. If you look at D-Pad Pro, it requires driver switching, different pins for each pad, etc. That is why I abandoned the idea of D-Pad Pro to begin with
Different pins yes, driver switching, not so much. I won't get into that, but lets just say you really only need to switch for three major types of controller: pre game port, nintendo, sega, and playstation. Also I plan on using the usb dongles, which means I install several drivers and the ones that differ get a seperate "port".
1st off, the ends of each controller have to be spliced. Some controllers require pull-up resistors, some don't.
The resistors aren't required. They are a fail-safe required for some parallel ports. I've built many of these interfaces before and never used a single resistor.

No the ends don't have to be spliced.... you go on ebay and buy the old, broken console, buy an extension cable, or do what I'm doing, namely buying up old multi-taps and using their sockets.
2nd, by having hardcoded identifiers, you can allow the controller to be recognized when plugged in. I don't know how you plan to "sample" the data coming in. If no buttons are pressed, then all the data is a constant high, and each controller is seen as identical. You would have to be holding a button when plugging each in. And then there are still interfacing/syncing problems.
Your looking at the problem from the wrong end. The driver would be very intelligent and the device type would be super generic (i'm figuring 8 axis 32 buttons) with a dumb chip, so that windows doesn't need to know what the driver is doing. The ones with identical clocks have identical chips and thus can use the same polling method. The ones without clocks all have different (and somewhat complex) circuitry. Running a small amount of voltage through the controller *could determine the type. It is an complex process, but far less expensive than making an "uber chip" on the usb end of things.
3rd, Some controllers require a clock (SNES, NES, etc) where as some have internal clocks. (N64, PSX) You have to be able to sync that info. And also account for the difference in button #s. Its not a small task.
see above.... about the buttons what exactly are you talking about? You setup the driver to have WAAY more buttons, enough to accomidate the most complicatd controller. When a simplier controller is plugged in, those buttons just don't work. Some controllers will have issues with this, but it could be managed on a controller by controller basis. This is probably the simplest part of the project.
4th, if your going to be using USB, all of the following should be done chip level. If you look at the link I posted earlier, the design follows this idea. The device driver only recieves a normal joystick input, regardless of what controllers is attached. Hope your good at ASM.
I disagree. If I have to go to the trouble of making a custom interface, I want the most expensive end (namely the usb chips and the programming service) to be generic, so that people can afford to make/buy their own. Although doing the hard work at the driver level will be considerably more complex, I feel it will make for a more practical solution. I'm not good at asm, but I will learn if need-be.
Finally, I just have to mention, why is it when I said I was doing nearly the same thing as Howard, I was ignored? I guess that just goes with the territory. Not complaining. Just curious.
Sorry about that.

My guess is because of my reputation. Lots of people have come and gone around here saying they are "a gonna" do this and that, but generally when I say "I'm a gonna" a piece of software or a tutorial, ect is up and running within a month. (This will definately take longer, so don't get any bright ideas.) Once you are around a little longer and produce some stuff people will take you more seriously. Afterall, it used to be that nobody listened to me.

I hope you can do this instead of me though, namely because I don't want to. It's just usually when you want something hard done around here.....
