I created a 2 player USB Fight Stick to work with PCs about 9 months ago. I recently put a Raspberry Pi in it and installed RetroPie on a Raspbian Linux install. So far I’ve got a few Homebrew ROMs as well as some from Mame’s website.
I’ve recently picked up a HDMI-to-VGA adapter and built a simple Scanline Generator to simulate a CRT when using a LCD monitor. This was demonstrated at the CGAUSA Christmas party.
I’ve just found out about another similar project in the European Union that has put a Raspberry Pi in an Arcade Cabinet.