I've recently gotten interested in making arcade machines. The cabinet on this site were created by me in my workshop, and are powered by the MAME software which allows PCs (and Macs) to emulate many classic and not-so-classic arcade games.
All of my arcade cabinets use MAME to emulate the old machines. MAME is free software that can emulate arcade machines, you can find out more at http://www.mame.net. MAME has versions for Windows, DOS, MAC, Linux, and other platforms. For the DOS version, I recommend at least a Pentium II. I tried a Pentium I, it was just too slow to be useful.
MAME itself just runs the games, so you probably want a graphical program to pick the games and configure them. This is called a front end. For DOS installations, FEMAME is the best. Doesn't show the various graphics, but clean, simple, and works. It does install well with FreeDOS, so you can get a computer without an OS and install all free software.
While MAME emulates games, it does not have those games within itself. You need the ROMs from the original games. There are three games where the rights owner has disappeared or the rights owner has released the games to the public domain. There's also a new service, StarROMs, that sells Atari or Atari Game ROMs legitimately, for $2 to $6 per ROM. They are hoping to add other manufacturer's ROMs in the future.
There are over 3000 ROMs available on the net. While I'm as anti-piracy as they come, I do believe it's different if these ROMs are unavailable for sale. So, while I do think you should only include the Atari/AtariGames ROMs that you've paid for, I have no problems with other publishers. I sincerely hope Williams gets their ROMs on StarROMs.
Feel free to e-mail me if you have questions, I love to talk about my cabinet designs.