Well, not just physical form. Philosophical form too.
My first post elicited some great comments, and a few months of thinking have pushed me into a rough plan of what I want to do. Let's see if I can flesh it out here.
For the physical space, I will be filling four tall display cases. They're all 18" deep and 79" tall. two are 31" wide, two are 62" wide. I won't be figuring the exact physical layout today, but those are the parameters. There's also the possibility of placing a standup arcade machine outside the cases. Decent power is available in all the cabinets; networking, maybe.
First, I still like the three themes I originally thought of, but here's some elaboration.
Why are games fun? I will base this on a short explanation of the reward structure in all good games (how they make you feel challenged but not overwhelmed, and how they have a pleasurable reward structure).
How do games work? First off, I got a great book from some friends: Racing the Beam. It's a study of game development on the Atari 2600, which could be succinctly described as "insane". Fun fact for you game developers: the 2600 had no frame buffer.
The specific example of how Pac-Man and the ghosts move will be a good way to show how games work from end to end. Video game systems are basically computers, so I'll treat them as such, but I'll explain the software system (graphics rendering, AI, game logic, etc.) as well as the hardware. If anything, I'll emphasize the software side.
This should be done with a video installation.
A bestiary of games. First, I think this has to be one or more video installations. I don't fancy having all of them be playable, but it may be useful to have some of the more obscure versions available. I will definitely discuss the Great Pong-Like glut, driven as it was (thanks, Racing the Beam!) by General Instrument's dedicated and cheap systems-on-a-chip.
I'd better be specific about the physical details and get to a short list of games and systems in the installation in part 3, and that had better be up in a week or two.