Yes, it's actually a PS/2 connection with a passthrough for my real keyboard. I just noticed that in a text editor, I also don't get repeated characters when I hold down a joystick or button. In MAME, however, it behaves correctly when a button or joystick is held. I've also seen correct behavior in other frontends, MAMEWAH and Mala for sure.
It may end up being moot, anyway. I just bought an I-PAC to rewire the HotRod with, because I need a USB connection.