Siliconera, a recent post on Sega's Japanese Virtual On: Oratoria Tangram website mentioned the possible creation of a new peripheral for the upcoming Xbox Live Arcade release. While it's not directly mentioned, the most tantalizing possibility would be a new twin stick controller that would recreate the original arcade experience.
Unfortunately, the post apparently notes a high cost for the peripheral. Considering the controller would only be used for one Xbox Live Arcade game we wouldn't be surprised if the controller never makes it onto store shelves. Even if it does, it's still possible it wouldn't leave Japan. Still, the twin sticks are really the only way to pilot a giant mechanized death machine, so we'll be keeping our eyes peeled for updates.
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