some questions
I like competitions. Some people swear by Perfect 360’s. Others love supers. It is all personal preference. All of the arcades I play at use competition sticks, so that is what I use at home.
You don’t have to include L1 and L2, but if you plan on playing games like Mortal Kombat: DA like I do, you will need the extra 2 buttons. It is generally a good idea to install all 8 buttons cuz you don’t know when you will need them.
Basically it works like this: order your buttons and sticks. It takes a couple of days to get those. Then build your box. RoTeNdO gave tons of good links in the first page of this thread. Making a stick just takes a little bit of research. Eventally you will understand everything and come up with a design of you won.
Soldering will probably be your biggest problem, and actually understanding the electronics board that you take from the controller. You have to know if the pad has 1 or 2 grounds, and you have to make sure that everything is properly grounded. Just do some good reading and you will get it.
Understand what you are getting into. If you don’t have a decent saw, a soldering gun, drill, and enough money to buy all of the little pieces you will run into money problems. Order the buttons and sticks, buy the wood, paint, nails, contact paper,
1 1/8 drill bit, and wood glue. Build that mofo. Then decide where you want your stick and buttons and drill that shit. There are templates available online that are good to use for this. Then go buy your controller to hack, 16-18 gauge wire from Home Depot, quick disconnects, and soldering supplies. Maybe a pair of wire strippers if you don’t have them yet. When the sticks and stuff arrive, do all of your soldering and finish that puppy.
Buy from Happ. They have competition buttons too…
Sticks run about 12 dollars each and 40 dollars for a Perfect 360. Buttons are $1.85 each I think. And remember, when you order buttons and sticks, they come with the microswitches included, which is cool. 
Do you have Photoshop or something like it? Make a background yourself. In the links provided there are some that you can download. Save it on a disk, and take it to a Kinkos or print shop. Have them make it to the dimensions you need. Or you could have someone in Image Mishmash possible make one for you.
I hope I helped you. Any more questions?