You should read "The Ultimate History of Video Games..." By Steven Kent
Its great and talks extensively about the arcade industry, but mostly on the manufacturing end. Very interesting stuff..
According to the book the first "kits" created that could be considered a "bootleg" were for the original Missile Command machine. Doug Macrae and fellow friend, Kevin Curran, decided to build "PAL" boards that would fit onto the circuit boards of existing games and modify the game play. Their first project was to create a board that went on Missile Command. They designed a board that would mount on top of the Missile Command game and would overlay code that they wrote on the original Atari code. They called the new game Super Missile Attack. It was basically an accelerated version of Missile Command with a few new enemies, a laser shooting UFO, and new color schemes. The original started selling theses "enhancement kits" (as they had decided to call them that) out of the back of Play Meter Magazine and Replay. The kits retailed for $295.
The best part of the story is that their next enhancement kit was for the original Pac-Man machine. It is what ended up becoming a full fledged game after a legal dispute with Atari. The game it ended up becoming......Ms. Pac-Man
Anyway...great book. Highly recommend it...
Jess