Finalized the cabinet plans after quite some time re-adjusting to fit my TV and height. Got the sides cut out successfully. I'll get some pictures up soon. Will be cutting the rest out and assembling some time this week. Should be primed on Saturday and painted on Sunday, but we'll see how that goes. Will try to get some pics up soon.

.update.    Bought 3 sheets of 3/4" MDF at $21 a piece, should do the trick.
You can change the cursors by setting them up however you'd like at the desktop then use TweakUI to copy those settings to the logon (I used a 1 pixel pointer for everything). Nice little program, I havn't had a chance to mess with any of it's other functions yet.

Finally have Windows XP tweaked so it looks a whole lot less like Windows XP running some frontend:
Tweaks:
Courtesy Random24 in a thread on the Build Your Own Arcade Controls forums.

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Getting a Front-end to run as a shell in XP and start with no user intervention
You cannot do this if your computer is part of a domain. It must only be part of a workgroup.

• Create a user that will be the auto-login user. (User should have admin rights at this time)
  
• Configure XP to automate the logon process if your computer is not part of a domain.
  
  
  
  • Click Start, click Run, and type control userpasswords2.
    
  • Clear the Users must enter a username and password to use this computer check box.
    
  • Click Apply.
    
  • Enter the user name and pwd you wish to automatically log on with, and then click OK.
    
  • Click OK again and you're all done.
    
  
  
• Setup your FE the way you want it.
  
• Open regedit and browse to "HKEY_CURRENT_USER\Software\Microsoft\Windows NT\CurrentVersion\Winlogon"
  
• Look for a string entry called 'Shell'. If it is not there, create a string entry and name it 'Shell'. Set the value of this entry to the name and location of your Front-end. For Lazarus, the shell entry may be "C:\Lazarus\Lazarus.exe" or wherever your Lazarus executable is located. For explorer, the entry is simply "explorer.exe".
  
• Log out as the auto-login user and log back in as another user with administrative rights.
  
• Change the auto-login user to a standard user. (This way people don't have more access than you want them to have.)

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I was unable to use mamewah as a shell until the welcome screen was disabled. It would say "Loading personal settings" and I could hear mamewah behind it, but it wasn't focused. Worked fine without the welcome screen though.

Disabling the blue Welcome screen and startup/shutdown messages:
Change from the default windows XP welcome screen to the older style by going to Control Panels>User Accounts>Change the way users logon or off. Deselect the "Use Welcome Screen" checkbox.
To get rid of the startup and shutdown messages via regedit:
HKEY_LOCAL_MACHINE>Software>Microsoft>Windows>CurrentVersion>Policies>System
If there's a DisableStatusMessages dword there, change it to 1, otherwise add it and change it to 1.

Change the default bootscreen:
I'm using LogonUI Boot Randomizer

Change the login background color (from blue to black in my case).
Login is disabled, but background color still shows up.
Background color is here:
HKEY_USERS>.DEFAULT>Control Panel>Colors>Background
It's a 3 digit RGB Color. I just changed mine to 0 0 0

I'd like to disable the cursor, but havn't figured out how yet. You can create a custom pointer and make it invisible, but Windows XP shows the default cursor for a few seconds before loading any custom cursors.
41 second boot up video (again, this is just video taken with a digital still camera, so quality really bites).
Small Version ~300k
Larger version ~3mb

Ordered two T-Stiks ($19/ea) and a PS/2 I-Pac($39) from Ultimarc. Remaining stuff for the cabinet: Spinner (homegrown, probably), buttons, replacement ball for the crayola trackball, speakers, and everything necessary for the cabinet itself (plywood or melamine, glass, bezel, velcro, hinges etc.).

Not much happening, really, still trying to decide between translucent leaf switch buttons (very pretty, but more finicky and prone to breaking), or horizontal microswitch buttons (more reliable, and they "click" when you push them, but not available with translucent button tops).
I've pretty much commited to having Mamewah as the frontend, and altered some of the skins a bit, and I'm looking into using Digital Jukebox with it.
Mamewah Skin:


Digital Jukebox (screenshot from their website)


Also mocked up Lucid's cabinet with some tagboard. Still planning on moving the front panel where the coin door is back about 6-8 inches.

Have given up (though perhaps temporarily) on both 3dArcade/Emulaxian and Dragon King. I've been having some bugs that I've been unable to solve with the former, due, I believe partially to the custom models I've loaded up. The latter just seems kinda bulky and slow for what it is, but this is likely just my inability to set it up correctly so far. I'm currently experimenting with Mamewah with pretty good results so far.
I'm noticing a bit of "back spin" with the Crayola trackball (where spinning the ball fast results in movement in the opposite direction, like car rims appearing to be moving backwards at certain speeds). Just a word of warning to anybody looking to buy one. I've got no experience with other trackballs being offered currently, so I can't say how much worse/better it is than other ones.
Will be altering the cabinet plans a bit as the height/angle is better suited to somebody a bit shorter (I'm about 5'10"ish and it seems like the cabinet in the plans could only be comfortable to somebody about 5'2").

Phew. Had a heck of a time with Partition Magic, boot sectors etc. etc., but everything seems to be up and running nicely. The hardware I received all seems to be working well. TV is a bit too blurry for extended use as a PC, but mame games look very nice. WinXP only vaguely tolerable with the help of higher DPI settings and extra large fonts.
WinXP:

Here's emulaxian, looks much better after some tweaking and custom models/skins etc. but I havn't gotten a chance to get to that quite yet.

Received the remaining puter hardware today, and will be setting up a hard drive for it tomorrow to test all my new stuff. Quick(hack) attempt at converting nickel coin mech to accept any coin (within reason) failed. While the mech no longer rejects coins, pennies and dimes to not have the necessary weight to trigger the token switch. Hack was done by removing the coin cradle, and some other parts, and adding drinking straws and masking tape. Replacing or altering the switch would solve the problem, but I'm not interested enough in the idea to bother physically altering the mech.

.update.    Ebay guy has been very accomodating. He'll be shipping out 2 replacement quarter mechs (so I'll "have a spare"), and letting me keep the nickel mech (which, other than the fact that I don't need it, works fine). Ya know, you try to be angry at people... :P

Got the coin door today. Works pretty well, but I'm going to need a new coin reject button , and the player 2 side is, in fact, a nickel mech (player 1 properly accepts only quarters). Ebay seller didn't disclose multiple pry-in attempts on both doors, broken reject button, and a big crack in the coin bucket (came wrapped in duct tape). Sigh. I hate ebay, we'll see how the seller wants to play this.

Received the CD-Rom today. Still waiting on: Coin door, and CPU/motherboard/ram package (guy got called out of town on family emergency, but it looks like he shipped today).

Received a couple of things in the mail today. Got the Radeon card and the Crayola trackball. Very quick video of the trackball: Crayolawm.avi (277k). Sound is out of sync, camera is not smooth, video is bad. ::shrug::
Here's a picture to give you an idea about the height of the ball outside of the casing.

Have found a frontend I'm fond of called 3d-arcade. LOTS of stuff to configure/skin, but seems to be worthwhile (take a look at the screenshots and video on the site). Runs fine on my desktop (amd 2400, 2700 ddr, gf4 4200), but I'm not sure how well it'll do with the hardware that's being shipped to me for the cabinet.

Going to see about having the spinner axle and flywheel machined, instead of trying to pluck out usable bits of metal from other stuff. Bearing will be a skateboard bearing (~$1) pressure-fit into the control-panel wood.

Won another eBay auction, this one for an over-under coin door with mechs. $31.89 + $16.00 for s&h and insurance.
Started hacking an old Macally iMouse for the control panel's spinner. I'm using this guide(pdf document) for reference, but a) I don't have the right mouse, and b) I plan on using ball bearings for better glide.

Purchased the video card for my cabinet, from the Anandtech forums (again). Card is a Radeon 8500 (non LE). Price including shipping, and insurance was $55. Won a bid on eBay for a Crayola Trackball. Buy-it-now price was $19.99, with shipping and insurance, price was $25.24. Plan on replacing yellow ball with a translucent blue Happ trackball, and backlighting it.
Mocked up the profile of the arcade cabinet with masking tape on my wall where it will eventually live. Outline is based on (OK, pretty much exactly like) LuCiD's cabinet plans(pdf document). I plan on changing a couple of things on this cabinet. The control panel will likely be moved up a few inches, and the panel where the coindoor will be will be pushed back some (less deep), to give the control panel a little more overhang, and our knees a little more room. There was some talk of building armoir-style doors onto the front of the cabinet (so when it was closed it would look a bit less like an arcade cabinet in our living room), but the control panel sticking out several inches on each side of the machine makes that impossible (or at least too difficult to attempt at the moment).

Finalized negotiation for some of the guts of the PC that will be running the project (also from the Anandtech forums). AMD 1700XP CPU, Asus A7N266-VM motherboard, Volcano 9 HSF, and 2x 2100 ddr ram came to $113 shipped.
Also picked up a 27" Zenith locally. Cost was $125. TV fell over (ugh) on the ride home, but seems to be OK anyway.

Purchased a 48x cd-rom drive from a dealer advertising on the Anandtech forums for $13. First purchase for the cabinet, not counting arcade tokens for "research."