I have a stock 64mb xbox. I downloaded surreal from xbins, should be legit. To properly update surreal all I have to do is delete the ini and copy over the new files right? I deleted the ini in Tdata as well. I help my friend with his xbox, he is having the exact same problem I am...... more evidence that I'm doing something wrong.
I've tried multiple versions of surreal over the years. I always have had the mempak problem. When I updated to b5.31 I ftp'd the entire emulator folder over, then copied over my screenshot and roms folder from the other version before deleting it. Then I went to Tdata and deleted the ini there. I formatted x,y and z as well. Is there a step I'm missing?
About you not being able to see your ghost the same as on the actual 64, do you mean you only see the shadow on the ground and their exhaust? I think if you use the default plugin (rice 5.60) that the ini suggests that is what happens. Try Rice 5.31, the track textures will look slightly different (more grain), but ghosts show up properly. I prefer the slight track grain over the invisible ghosts. I just noticed that the plugin I suggested matches the current release version, 5.31

I also have a 64mb xbox. I noticed that you deleted the ini from Tdata. I deleted my "ini"
, but not the ini from Tdata.......probably that could be the root of the problem. Might want to reupload b5.31 ce to your xbox and try it.
Also, if you're playing South Park Rally....it has a problem where it fails to detect the controllers that are not plugged into the xbox controller port when you are using the "Mempak" or "None" option. Might want to disable the controllers you will not be using.
I've also noticed that some games fail to repair your Mempak problem. The game that fixed this issue...I believe was Superman...which is very odd. Although it repairs your Mempak, it will still say "corrupted mempak" when entering other roms, but this time it will successfully repair your mempak. Might want to try this as well.