This has been an issue of debate lately in the Vigo household. I for one enjoy playing games on my cab at a moderate level, or at least what I consider moderate. The Missus thinks I am playing pretty loud.
I don't like changing volume on my machine because it is controlled via pot behind the coin door, but have had the talk about the volume I play at. I compromised, and I still can get into most classics without the volume being too loud, but I know she wishes I turned it down more. Arcade sounds are very distinct.
The problem I ran into was with movies and modern games. We have a fairly powerful surround system, and I try my best to find a volume that wont wake my sleeping kid. I can't find that sweet spot. When I turn the volume to a level where explosions won't be too loud, I can no longer hear dialogue. So then I raise it to a level that I can hear what is being said, but I get huge booms when something loud happens. I tried cranking the bass down, but our surround doesn't allow too much tweaking, and it still is loud.
I really wish my surround came with a "night time" setting to level out the sounds a bit more, I have resorted to wearing headphones, but it is too much of a hassle to make it worth it.