I know people have done such things. I'm using VGA in a Mame cabinet with the video card configured to output the correct frequency. It lets the games run at actual arcade resolutions and looks great. Almost as good as an actual arcade monitor but much much less expensive. The main difference between that and using an actual arcade/jamma video (as far as I remember) is that the voltage levels are different....maybe something with the the sync signals. So the circuits are very similar. But it was only a handful of parts.

AS far as the circuit that goes in place of the big honking switch that people use so flip between RGB and OSD... The schematic is buried in the shmups forum(around page 68,69 or so it looks like).

I wish I could be more help but I only did this once about 3 years ago.