OK So what have I been doing for almost 2 weeks?
First, I cut my button holes. It was a challenge keep the overly in place to mark all my hole centers correct, but I think I managed it. So then I used the standard 1 1/8" hole saw to cut the main button and joystick holes. In cutting the holes I somehow managed to get one joystick hole to be a bit oval. Hopefully it's not noticeable.

Complications came thereafter: First, I needed the correct hole size for Atari volcano buttons and small Radio Shack pushbuttons. I ended up buying a giant 1/2" drill bit. I had a hard time deciding between this and a cheaper spade bit, but I figured the standard bit would be easier to keep centered (the position really matters!)
So I drilled those. Next dilemma. How to route out wood underneath so I could mount these buttons (they are made to be mounted to thin surfaces--my panel is 3/4" thick).
I toyed with the idea of making mounting plates (Great solutions were presented here:
http://forum.arcadecontrols.com/index.php?topic=47178.0 ) But that would require routing out some precise rectangles for the plates. I only have a basic high-speed router, which I find difficult to do precise cuts with (unless we're talking straight edges). I bought a Dremel router attachment, but it ended up not fitting my Dremel (back to the store it went!).
So I decided in the end that I will glue in the two Radio Shack buttons. As for the Atari ones... I finally figured out that I could use some short hole saws I had to cut out a portion of wood on the under-side, and leave a thick enough layer at the top to mount the buttons to. (Keep in mind folks, that although there are solutions, I'm also trying to keep budget down. A Forstner bits, new tools, etc, are all expensive options for cutting a few holes. The Dremel kit I could see myself re-using, so that's why I bought that...)
I measured the max thickness I could keep. It ended up being 3/16ths", and what do you know, my short hole saws were just the right length to leave that much! I clamped a 2x4 under my panel and clamped it all to my work table. I drilled a small guide hole to help keep the hole centered right. I cut out two circles wide enough to accomodate my Atari buttons. I cut two more smaller circles to help in the chiselling out of the wood. The drilling process ripped most of it right out. So then I used the router to even out what was left to a flat surface of the right thickness.
After that, I examined the results and, well, I had to wonder why the routing hadn't removed more. My original hole saw circles seemed to go much deeper. How was this possible?
I unclamped everything and looked under at the top of my panel. HORROR! Two half-circles where it had cut right through. Crap! It shouldn't have cut that deep!!
So I re-clamped the 2x4 under the panel and I filled in all the outer edges of the hole with Gorilla glue, otherwise there's no way the surface would hold up to button pushing, wiith holes half-cut.
That's where I'm at now. The Gorilla glue is amazing. It foams up to fill in cracks and then hardens quite hard. I will need to route out the holes again to remove excess glue. I have my fingers crossed as to what I'll find when I remove that 2x4...