The microswitch is a common component used in the arcade game industry (and many other industries as well, but I am focusing on the arcade ones here). They are basically a small sealed switch (in a plastic housing) that is extremely reliable. They are also metered as well (this means they produce a small "click" everytime they are activated). The standard microswitch is manufactured to very exact tolerances, which means you can effectively mix and match switches from different manufacturers.
Standard microswitches can be wired in the "normally open" position (for most arcade applications), or the "normally closed" position (it is even possible to wire a single switch to both, but I can't see much of a use for that). Microswitches are often refered to as "Cherry switches" (because Cherry is the leading maker of them).
Random Noder "Hey, TBBK, aren't you forgetting something?"
I almost forgot to mention what microswitches are used for on an arcade game! Microswitches are used in most newer joysticks (these will often be called "clicky" joysticks, because they "click" a switch in every direction), and in most arcade buttons as well. They were adopted for use in controls because of the constant adjustment needed for the older style leaf switch controls.