The Orginal Mugen was/is a DOS game so there is no support for wuch avi/wmv/xmvv files.And intros are realised in other ways.
The orginal reselution of Mugen is 320 X 240 @ 16 Bit.
So this not a standart today but OpenMugen use some garphic filters to produce a better image.So the reseultion of OpenMugen is 640 x 480 @ 16bit.
A higher reselution or more colors are nonsence because the soure image is 320 x 240.
It is like in Mame the games are desigen for low res and then stretched with graphic filters.
OpenMugen use the same filter