I am using Custom type.You should use Normal type because i don't think you want to go on the whole internet and search for Custom Portraits for your chars.

Ok to change to Normal type open your mugen.cfg wich is in your data folder with notepad.

Look for this section:

; Not accessible in options screen
motif = data/Custom/system.def
;motif = data/Custom319/system.def
;motif = data/Custom600/system.def
;motif = data/Normal/system.def
;motif = data/Normal319/system.def
;motif = data/Normal600/system.def
;MP3Volume = 50 ;Not yet implemented

This is my version using Custom type.To use Normal type put a ";" next to motif = data/Custom/system.def
and delete the ";" next to ;motif = data/Normal/system.def.

Then save.
Now you can add chars and stages in data/Normal/select.def.

Added (2009-08-28, 1:16 Pm)
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that fixed my problem of adding characters... +rep for this... (cant seem to rep in here)
but do you know how to fix the problem of getting off screen...?

Added (2009-08-28, 1:20 Pm)
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it looks like this...