I finally got around to hacking a minimus:

so it would translate the four hall effect sensors from a blackberry trackball:

into mouse movements.
I've configured advmame and advmenu to rotate, so the screen can work as a vertical. Using this 3.5" 320x240 screen for now (but imagine a 90deg rotation):

The raspberry pi is set to 320x240, default overscan. With the minimus connected, I enjoyed a few games of centipide - sort of, it was all a mess of wires and needs proper assembly, but it worked quite well otherwise. I think I'll tweak the mouse code a bit to include the "accelerate" type of functionality, since the trackball does not spin freely.
I've also started prototyping a cp for it. Used a forstner bit to provide clearance for the trackball, so the ball would be exposed properly:

added a few buttons and mounted temporarily to see if I'm on the right track:

I'm happy with the results so far.
I'll have to check MAWLER to see what vertical games run on a trackball, and how many buttons are needed.
I like the idea of a wireless keyboard - seems better than having to provide access to the USB ports. Another option would be a wifi dongle, which would allow telnet/ssh access.