edit in notepad the mugen.cfg
look under Video Win
;Enter the width and height of the resolution you want to set here.
;The optimal resolution is 320x240, but if your video card has problems
;You may want to try 640x480.
Width = 320
Height = 240
DXmode = Windowed
change the red text by...
Hardware and Software
-run in full screen.
Windowed and Overlay
-run in a window.
If hardware, software and windowed fail try "Safe"
Use "None" only if you cannot get anything else to work.
Note: Overlay is not supported by all videocards, but can be faster than windowed if it works.
Depth = 16
16-fastest, 24,32-slower, 8-slowest/worst