I started putting together the hardware for this project. As I will be on the road for most of December, I do not expect to create anything more fancy than the prototype circuit I have already built. After all I see this more as a software competition than a Hardware one. The prototying board I'm using is a "777" board from futurlec.
The circuit is centred around the Attiny 2313, with USB connector for Power, the ISP connector at the top, and a connector for the VGA / Kbd breakout module on the right side.
The VGA breakout board is from Parallax. It also contains PS-2 connector for keyboard and mouse, but I will not use them for this project.
The controller is a cheap one I got from eBay. I need to break it open and connect to the switches as I suspect that there is some kind of uController inside this one.
From the background in these pictures, you can see that christmas has already come to my house.
Update: After doing some research on the controller I found that it actually contains a 16 bit parallell load, serial out shift register, no code / firmware. The buttons are just making contact directly on the PCB surface, so it would not be straightforward to wire each switch to a digital input. I now plan on using the serial signal as input to the game rather than discrete switches, maybe using the USI peripheral in the attiny (like a SPI bus). If the code required for this is too much to fit, I will have to change plans to use discrete switches (left, right and fire) instead of the hand controller.