It should work with WinMugen, hi-res WinMugen and Mugen 1.0. The program reads from mugen.cfg and the system.def file of the selected motif, and tries to scale the screen accordingly; it should get it right for Mugen 1.0 but for hi-res WinMugen you need to use the setting available via the File -> Options menu.
Other options allow you to hide the top layer while dragging a character around - useful for some motifs where the grid is partially hidden. You can also choose to show or hide empty cells (note this only applies to the viewing mode within the tool; the actual Mugen setting is not affected). Also you can choose to disable alpha-blending (I added this because for screens that make heavy use of these effects the program can start to lag if it tries to display them all; this particularly applies if a transparent animation is used as the cell background).
Animations are not played, but the program will try to display single frames where possible. It tries to be clever and exclude any frames that might obscure the screen, but I included an option to randomize the frames in case one of these does get displayed. There's also the option to exclude animation elements completely.
What else... zipped characters are supported (although the program may be slow to load if a lot of these are included). Characters can be added from anywhere; if they're not located in the chars directory then an absolute path will be used (however zipped characters will be copied to the chars directory as this seems to be a Mugen requirement).
Cons: the more characters in the select screen, the longer the program will take to load. Flashier motifs with lots of alpha-blending can also slow things down, as mentioned. Other than that, no doubt there will be some select screen paramaters I've failed to implement correctly, so please feel free to post details of any errors you come across. Also any random crashes, weird behaviour, etc. Note: one issue I'm aware of is the width parameter, used with parallax elements for a perspective-type effect. I don't support this currently and just display the sprites as they are.
One more thing to be aware of: a backup is made of every file before it's first edited by the program - named (for example) "select.def.vselect.bak". The select screen def file is the only one ever edited, unless you use the "set as default motif" option which just updates the appropriate line in mugen.cfg.
http://www.mediafire.com/?dml09gvvsn965u0