Consider a Steam Link, http://store.steampowered.com/app/353380/ or similar system to mirror the content from your PC. It will handle sending video/audio to your TV/arcade and sending the inputs back the desktop.
Then I just tell VMWare Workstation that the arcade joystick USB should go directly to the arcade VM, and drag the VM window over to the arcade screen. This means I can use my computer directly as normal (I code in a linux VM on it), while the arcade is running independently. It works really well and lets me use a spare 4ghz core to run Hyperspin+MAME faster than my old arcade PC ever did.
Otherwise, it's gotten so they are pretty decent now. When the Links first came out, they were quite laggy and unstable, but after a hundred or so patches, it's settled down.
I'm also going to use an HDMI switcher so that I can connect it to a faster machine like my laptop as an option.