I am considering turning an old computer into a dedicated arcade box that is capable of running about 50 or so classic arcade games. I have an old computer that has 32mb of ram (can upgrade to 64mb - if needed) a 333mghz processor, generic graphics card (8mb?) and about 4 GB hard drive. My questions are:

Which linux distro should I run?
I just want to run classic arcade games, nothing else.

Which arcade game engine should I use?
I am thinking about something similar to mame32 for linux.

If this turns out to work, I plan to buy an old arcade cabinet and hack my keyboard so I can have joysticks and buttons on the top.

Any suggestions?

I advise putting in the extra RAM and maybe trying Gentoo. It should be possible to make a very stripped down install which only includes the stuff you need for your gaming setup, but unlike many other lightweight distros, installing the programs you need should be supported through portage.

Some game emulators use OpenGL, so it may be worth finding out more about your graphics card, I've not had a lot of luck getting 3D graphics acceleration working with older graphics cards.

ok. pulled the other ram. anyone have any suggestions of which emulator to use?

Have you ever checked out AdvanceCD? http://advancemame.sourceforge.net/cd-readme.html
I've used this for quite some time now...J