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It is an AC line filter. It does pass AC voltage, but suppresses RF noise from computer power supply (or arcade machine power supply), and keeps it from getting back onto the AC power grid.
It is really used for Electromagnetic Compatibility so you don't really need it for your arcade machine.
If you like the convenience of using the adapter, you could just remove the board and components and just solder the AC wires to the pins.
If I decided to leave the PCB on the adapter, would it interfere with anything in an arcade game? Would it help/hurt it in anyway? I read the wiki article, but unless you have prior knowledge of the subject or work in a related field it is in a different language. Can someone boil it down for me?
Thanks again guys,
Greg
Are you just wanting to use the AC Line filter for convenience to plug in your machines?
If so, I would suggest removing the components and just passing straight AC through it.
The filter may have been part of the integral design of the original computer power supply, so it may do other things besides filtering, such as regulating voltage. If that is the case, you don' really know what it will do when connected to your arcade machine. So you really don't want to take a chance.
As far as EMC is concerned, the AC line filter is there so the computer/power supply can pass a conducted emissions test that measures the level of noise that the computer/power supply emits onto the AC power grid through the AC power cord. The filter is generally not needed for functionality of the equipment.