Okay, solved and this is one I recommend making more clear in the documentation. My issue was that I ALWAYS keep a wireless keyboard connected to my Retropie. It's just a tiny dongle taking one port so why not? It's so much easier for certain tasks.
However, I kept wondering why the test rom for Intellivision was reporting that I was on controller 2 and every other comment pointed to controller one. Then I noticed posts where people said that Daphne and Intellivion (jzintv anyway) assign the first controller they see, which in this case was the keyboard -- and that explained why the keyboard worked. Ugh.
@mitu Thanks for the pointer on the docs. I've gone through a lot of research and reorganizing since my last post, but it now appears to be working! There were two issues at play: bad rom directory structure and bad install of vldp2.
For reference to the curious, here's the problem I was having with vldp2. Every time the emulator started, it would give this daphne error saying ERROR: could not open the VLDP2 dynamic library (file not found maybe?):
For the sake of testing, I ran the following from the command line to see the console output:
libvldp2.so: cannot open shared object file: No such file or directory
Could not load VLDP dynamic library!!!
Shutting down sound system...
Shutting down video display...
Well the install script for daphne is supposed to install vldp2 for you, but in my case, it wasn't doing that.
You can manually install the Linux x64 version of it by running the following in a temporary directory:
git clone https://github.com/DavidGriffith/daphne.git
make -f Makefile.linux_x64
sudo cp libvldp2.so /lib
My theory is that the script was compiling vldp2, but then failing to copy it to the /lib directory that it's supposed to get installed to (that last line in the command above).
I tried fiddling with the script a little to get it to work automatically, but gave up because it was hard to debug. If I can gather the motivation, I'll try to fix it properly and then send a PR to include the changes in RetroPie-Setup.
Run the speaker system for the cabinet to the audio jack.
That's the best way, and it's pure sound from the card.
HDMI sound is good, but really for a console style setup.
I have 3 MAME and 2 dedicated Arcade cabinets. All but one is set up this way. The one cabinet is all original, so I didn't mess with the set up. The rest all use 2.1 sound systems plugged into the audio jack of whatever I have running the cabinet.