If you're playing games in landscape orientation, the smart cover does that job perfectly. I use it all the time when playing SNES games on my iPad using a wiimote. I just prop it up where ever, and have a blast.
For MAME games, specially older games that look best in portrait orientation, just make yourself one of these...
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It cost me $3 for the block of wood, and about 15 minutes of cutting and sanding (it also helps having a friend who does woodworking).
Other than having to lug around a couple extra pieces if I want to play emulators while I'm out and about, the smart cover and my chunk 'o block work perfectly for me.
I think it's finally coming around, at least for SNK games. I know Metal Slug 3 supports the iCade.