I would recommend getting an old cabinet and refurbishing it. It's cheaper and way cooler. You can often get gutted cabinets for next to no money, but if you can, try to get one that has a nice screen, there's no beating the feel of an old CRT.
Then you need to decide if you want to go for MAME or the real thing. Most of all arcade games (except for the really old ones) adhere to a common standard called JAMMA. That means they have a big-ass connector with in- and outputs that hook up to your cabinet.
You can also get 1000-in-one cards, but they're basically an emulator too.
If you decide to go for MAME, you don't need a very fast computer. I ran mine on a 1ghz old amd thunderbird and it worked great, you won't be able to run the never 3d-type stuff, but noone cares about that anyway

Don't get a ready made joystick. Get the parts from a place like ultimarc or maybe something closer to wherever you live.
Also, don't put a bazillion buttons/joysticks on there. It's ugly and horrible. The most flexible would be a two player setup with 4 buttons and an eight-way joystick per player, add to that a start button per player. No more.


