Chuggy,
Maybe you should do some reading around this sight and others related to arcade emulation.
Most people who build a cabinet to house their computers use some sort keyboard encoder (e.g. hacked keyboard, IPAC, Keywiz) or they use a hacked gamepad of some kind.
They hook these up to the inputs on the arcade controls (buttons, joysticks, trackball buttons) so that the front end and the emulator responds to the appropriate keystrokes.
In reality, when you push an arcade button or move a joystick, your computer sees it as a keystroke from your keyboard.
Hope this helps,
Rocky