You my friend are a genius! I set controls on player 1 to "Select" = "Start" and "Start" = Nothing and player 2 "Select" = Nothing and "Start" = "Start". Works like a champ! I wish it was a little more intuitive, but it seems to work great. Thanks again for all your help!

for mame2003-plus on digital only turn analog off you only turn this on for analog controllers if your using them. ie snes and joysticks use dpads (digital hat). analog off( this is the default mode) you should do the following in settings enable legacy mapping ( this is important when it needed for analog or games using analog controls even on a dpad) in analog mode : directons are on axis 0 an axis 1 (lstick) in analog mode off (dpad is used)

@grant2258 You're right. My mistake was that I used mame2003 instead of mame2003-plus. That was the reason the xml wasn't generated in ../arcade/mame2003_plus where I looked first. To access the MAME tab menu, I ran a game that I thought was using mame2003-plus, but either I changed its runcommand setting back to mame2003 in the past or an update did it. Thanks.

I know this topic is old, but I was having a problem with building this as well recently. Basically the same error. Resolution was to disconnect all controllers (I had 5 plus keyboard plugged in.) Confirmed this as the solution in my case, and adding it here in case others experience it.