Use the first conversation choice. There aren't any hints on the arcade sequence, except to save every time you get further. Talk to the captain to save. Go east and follow the path, then go north into the town. Go north and then west. Go inside the house and down to the basement. Talk to the girl.
Note : A lot of people seem be stuck in the next section, where you have to destroy all the camera's. There is a small chance you can't destroy them all within the time limit, because of your computer's speed. In that case, download Ultimate Cheat, it's in the Dink Smallwood section.
You will now have to destroy all the cameras (by punching them). The only help I can give you is that once you have all but four cameras destroyed, head west to the pumpkin patch and take out the remainder. - TIP: There are many potions to be found if you walk along the beach. There's also a screen where you hear a tree burping, talk to it and it will reveal a stairway to a healer. - Go to the fountain (NE from Cass's house). Drink the water. Go west twice, and south three times. Talk to the duck, and learn duck magic. NOTE: if you kill the duck, you'll have to restart. Go back to cass's house, and talk to her. Go where she says to go, and talk to her. Go north four times, and pick up the head. Go south, east three times, and then north. Sneak away. Go back and talk to cass. Use the green head with the blue machine. You will now have to solve a Simon type game. The combination is: Blue, red, blue, green, red, green. Go in the door. Run past the robots for four screens. Kill droid 12. Use duck magic as fast as you can for the next robot. For the next section, either choice wins the game.