I would have to say that the Arcade monitor would be worth the extra work. Personally I wouldn't think of using a PC monitor in a cabinet, I would rather a TV using S-Video out. Reason? Console/Arcade games just look far better on low resolution displays. PC monitors with their really small dot pitch and high resolutions just make everything too clean and jagged. Using a TV/Arcade monitor gives everything a softer look, rounds harsh edges and gives the impression of 3D objects. On the PC monitor a sprite might look like a flat 16 colour object but on an Arcade monitor Sprites will almost look 3D and the colours tend to blend together slightly giving the illusion of more colours.
A few days ago I made a cable from VGA to RGB (you don't actually need any third party hardware but it can be much easier, costs $ though). The difference with RGB is amazing over S-Video. I can actually read the text in Windows easily and all games look really good. I tried Arcade games and Console games through emulation (NES, Genesis, SNES, N64). All of them looked far better than I had ever played them before. Most look pretty bad on my HDTV with the exception of N64 which I can crank out at 1776x1000 resolution but even then it was nearly as good in 640x480 through RGB. I still need to do some tweaking to get rid of the overscan (fine for console games but Arcade games were obviously not made with that in mind). Also need to do a bit of tweaking to get more custom resolutions to display (everything works fine in 640x480 but I'd like to try and get actual Native resolutions working for everything).
If it's going to give you headache's or break the bank then I would recommend sticking with the computer monitor for now (you can always use Scale2x, scanlines or some other effect to make the games look better on a PC monitor). Keep the RGB monitor for a time when you have the money or technical skills to get it working in your cabinet. The cable is the easy part check the pinouts of a VGA connection to find out the Red, Green, Blue and H-Sync wires (Pin 1, 2, 3, and 13) and then connect them to the same connections on the monitor. The hard part run the software "Powerstrip" and set it up to use 640x480 resolution at 15.7khz check composite sync and interlaced (probably need to do this remotely). There is some good info here
http://www.idiots.org.uk/vga_rgb_scart/ you can skip the info on connecting to SCART and view the powerstrip info. If you were using a DOS based MAME only you can get away with only needing the cable and use ArcadeOS or the other route is to buy the hardware to make it easy like it said in the previous posts.