Preparing your cabinet
Take everything out of the inside of the cabinet, and I do mean everything, wires, boxes, lights, circuit boards and anything else that you could possibly unbolt or unscrew. Most of it you won't be putting back in. Be careful when removing the monitor because you can get shocked badly. Actually you should just be careful with everything, as all this stuff is going to be going on eBay later, so you don't want to break any of it. Most parts will come out easily with standard hand tools.
Now you are going to start taking off everything from the outside of the cabinet. Remove the control panel, coin door, marquee, and T-molding. Take out the glass over the monitor if you haven't already. The t-molding may be troublesome, as sometimes it wants to break apart instead of coming off in one long strip. If yours breaks apart, then simply visit t-molding.com to order some more, it isn't very expensive.
You should now be looking at nothing but a wooden cabinet and a pile of parts. Some of those parts are not going to be needed for later, so you might as well list them on eBay now. Prime parts to list on eBay include the power supply, original monitor, circuit boards, and the JAMMA harness. Some games won't have a JAMMA harness, they may use the Konami Standard or some other wiring scheme, but no matter what scheme it uses, you can still extract the wiring harness intact and sell it on eBay.
Now it is time to begin painting the cabinet (skip this if your cabinet has laminate installed, or if it already has good sideart). You are going to want to do this outdoors, or in a well ventilated area. Buy a lot of sandpaper and sand down all the wood. You may have to use some wood filler around the edges. Then you should spray the entire cabinet with primer/filler, and then you should sand it again. Repeat this step as many times as you wish, as it can only get better if you do it correctly. You should end up with a smooth primer gray cabinet.
Now you are ready to lay down the actual color. One can of spraypaint will not be enough. You should figure on needing at least a dozen cans for a dark color. A light color such as pink or yellow may take as many as thirty cans. I have found that one can is just enough to put a single light coat of the entire cabinet, so I paint that way. You should paint one coat, and then wait at least an hour before painting the next coat. Patience pays off here, it really does, doing the coats too close together can cause the paint to run.
Once the final coat of paint dries you are going to test fit your monitor. I suggest using either a 19" PC monitor or a Wells Gardner VGA open frame monitor. It is also possible to use the original arcade one but it is much harder and does not have as much functionality as the pc monitor, and the official version of MAME no longer supports arcade monitors. You will more than likely have to construct some sort of mount inside the cabinet for your monitor. If you were smart enough to get this far you should not have a problem. Remember to get the new monitor as close to where the old one was as possible.
Ultimarc.com now sells a video card that drives a standard res arcade monitor just like it was a VGA monitor. If your monitor has a great picture, then I suggest just keeping it and getting this card.
You will probably have to get a new piece of glass made to go over the monitor. The original probably won't line up with your new monitor. Just bring the original to any place they cut glass and have them cut you another one. Mask off the section that will not be painted and then paint the rest flat black from the underside. It will make sense once you see it.