Have you set-up a joystick in MacMame before? If not, I suggest you check out the general guidance on doing that (in short, start up a game, get past the intro screens and press 'tab' to navigate through the menus).
I that's not the problem, can you explain some more about what you mean by 'Not working'? Does MacMame respond to the joystick at all? You know that the Xarcade is really just pretending to be a keyboard? Go to text edit and wiggle the joystick. Do you get some text input?
Let me know!