I am not going to attempt to provide a guide as there are much better guides out there than anything I can produce.
In addition to the arcade function, we wanted to display a slidedeck when not being used for gaming.
Two main approaches I see are
1) install RetroPie, then add X packages
2) install Raspbian, then install RetroPie on top of that
The reason we want X is to run a presentation software such as pipresents, which we are already familiar with.
For approach 1) I roughly followed this installation order.
Install lightdm and lxde
This takes a long time, maybe 30 minutes:
sudo apt install lxde lxde-core lxterminal lxappearance
sudo apt install lightdm
sudo apt-get install xutils
sudo apt-get install xserver-xorg
But one of my games didn’t run properly afterwards, so I am focused on method 2) for now.
I’m having trouble running startx from a non-console terminal. One thing I’m trying is:
sudo usermod -a -G tty pi
sudo apt-get install xserver-xorg-legacy
These two commands still didn’t do the trick, so I edited this file
and replaced allowed_user=console with allowed_users=anybody, and that worked! Once.
Then I installed RetroPie, turned it off so it does not autostart, and tried startx from a non-console terminal and I see this error:
(EE) xf86OpenConsole: Cannot open virtual console 2 (Permission denied)
then i re-installed xserver-xorg-legacy and startx once again worked. Hmm.
The instructions for installing RetroPie on top of an existing Raspbian installation are here:
You should be comfortable with the linux command line.
Refereces and related
Good discussion on X windows, display managers and desktop environments: https://raspberrypi.stackexchange.com/questions/26836/possible-to-reinstall-x-server-and-use-graphical-after-having-removed-it