Hi there,
This version uses Mugen 1.1 as a base, so if you're familiar with that, you should be all set. (So, yes.)
You can change the characters by editing the select.def file directly, but I've also included vselect if you want to give that a try.
You can add your own characters if you want. You'll need to play them in the chars folder and then edit the select.def file in data/MMMD
This version of the Mugen engine doesn't natively support an explicit Vs CPU mode, but you can effectively get there by using ctrl+1 or ctrl+2. This will enable the AI for player 1 or 2 respectively. So, load up into either versus mode or watch mode and toggle the AI.