LCD's involve hardware stretching the graphics. It's possible.. in fact I think there's a section on it either in the MAME FAQ (EDIT: http://www.mame.net/mamefaq.html#h14) or MAMEWAH FAQ or instructions... i remember glossing over it. You'll loose the arcade look and some games will look stretched, but it'd definitely be awesome to have it built into a coffee table or something. You could just build a low to the ground cocktail cabinet:

http://home.comcast.net/~cpviewer/pics_cocktail.htm

Full plans are available here:
http://home.comcast.net/~cpviewer/cabinetplans.htm

and are insanely detailed. You could modify it to your hearts content though. That's what I always really wanted, I just lack the workshop to build it in. I'd LOVE to replace my coffee table with a cocktail cabinet!