First, determine the kerf of your cutter. For service bureaus like Ponoko, they may be able to tell you the kerf for the cutter and material you'll be using. Otherwise do some test cuts, e.g. a set of 1cm squares, and measure the average kerf using a good digital caliper.
From there in reasonably recent versions of Illustrator, select your path, then use Object > Path > Offset Path...
In the Offset Path dialog, enter your measured kerf value. E.g. I've been working with a 0.19mm kerf lately, so I would enter half that in the dialog (literally ".19mm/2") and confirm.
A few notes:
* Make sure your path is fully joined (select everything then Object > Path > Join) before using Offset Path. If you zoom in and see your path looks like a series of disjoint rectangles, it wasn't joined; start over.
* IMPORTANT!: Offset Path creates an additional path, instead of modifying the selected one. At this scale, this is impossible to see. You'll need to zoom waaay in to see the pair of paths, ungroup them, then select and delete the inner one. If you don't, you'll end-up double cutting the same path, which can be a good way to make fire. :-/ (Ponoko checks for and will usually flag these kind of errors.)
