I am personally in favor of dropping Mame in there. A computer that can play UMK3 in mame (plus you know all those other games) is not that expensive. Plus you could use a VGA monitor in it too. (you can put in a regular computer monitor or get a VGA monitor designed to fit into a cabinet for more money).

For controls you can buy an X-Arcade and bolt it on although I've heard of issues with those. You can also wire up your own controls. Just run wires from real arcade controls off of happ or something and wire them up to an i pac keyboard controller from ultimarc or wire them up to the contacts on a gutted controller of some other kind.