Building your own Arcade Cabinet from scratch can be a big job, and there are no guarantees you'll get it right the first time, but don't let it get you down. I myself have made a mess of several controllers, but as long as you don't expect perfection first time around you should enjoy the experience! The creator of ArcadeParadise.org made 3 full cabinets, each to improve on the previous one. Having never made anything larger than a pencil box with wood, or anything at all electronically, building the cabinet was a learning experience for me. Here's some things I learned throughout the process.
Control Panel: The control panel is the interface between player and game, so any major screwups will nag you everytime a game is loading and you look down. Probably the best advice I can give is that for drilling the holes, a hole-saw blade just doesn't do the job well enough to justify the $10 you save compared to a Spade bit. Spade bit cuts are defined and accurate, whereas circle bits scratch and make a mess. A 28mm Spade bit is a good fit for buttons. Good quality holesaw blades are still good, but usually more expensive. I recommend a spade bit personally.
Left: holesaw right: Spade bit
Australian retailers: If your in Aus and need some parts for your cabinet, there are a few online retailers that should have the stuff you're after. Ozstick.com.au is a small operation with great service and a good variety of parts. Highway.net.au deals with all aspects of arcade and amusement gaming so if you're looking for something more specialised its a good place to check out. Finally, ReplayArcade offers parts and also sells the X-Arcade arcade controllers if you prefer to go that route.
How the pros do it: When designing the layout there are many different ways to place the buttons and it can help to check out the various layout styles. There are a wide variety of arcade sticks produced for consoles by Sega, Namco, Capcom, Hori and many others and many different button configurations. From the straight line of Street Fighter 2 sticks to the classic 'arc' there's sure to be one that takes your fancy.
If your basing your controls on a Playstation it will also give you some ideas on where to place the L2/R2 buttons if you dont like the 8 buttons grouped together.
Terminal blocks are great: The original tip comes from this page but it's worth repeating. If you plan on using a console control hack, using a terminal block in between the control pcb and microswitch will save you a lot of grief. By separating the cable you can make adjustments without putting stress on the solder joint on the pad.. Which you will need to when you inevitably find some buttons are around the wrong way when you first power up. For only $3 its a good way to clean up the wiring.
Painting MDF: MDF is a popular wood for cabinets because it's easy to work with and economical. It's also easier to get a smoother paint finish on mdf than on particleboard (chipboard), but if you try and paint the side of an MDF you'll notice that it soaks up paint like a sponge. Apply a thin layer of 'pollyfilla' or any product used to fill cracks in drywall. Let it dry then sand it back and paint as normal.
