I must be getting sleepy, I didnt even see that option first time. I dont have any idea why it is greyed out.
Have you tried running a game in command line with the -hws argument?
I actually wouldn't know how! I use mame32. But I'm guessing the hws thing would be in a file. I looked in the mame32.ini file. I highlighted the bit I think is the equivalent of what you are talking about. Is there anything in this list that looks like I should change?:
### Mame32.ini ###
### Frontend Related ###
clones 1
### Windows path and directory options ###
rompath roms
samplepath samples
inipath ini
cfg_directory cfg
nvram_directory nvram
memcard_directory memcard
input_directory inp
hiscore_directory hi
state_directory sta
artwork_directory artwork
snapshot_directory snap
diff_directory diff
ctrlr_directory ctrlr
cheat_file cheat.dat
history_file history.dat
mameinfo_file mameinfo.dat
### Windows video options ###
autoframeskip 0
frameskip 0
waitvsync 0
triplebuffer 1
window 0
ddraw 1
direct3d
hwstretch 1
cleanstretch auto
resolution auto
zoom 2
refresh 0
scanlines 0
switchres 1
switchbpp 1
maximize 1
keepaspect 1
matchrefresh 0
syncrefresh 0
throttle 1
full_screen_brightness 1.000000
frames_to_run 0
effect none
screen_aspect 4:3
sleep 0
rdtsc 1
high_priority 0
### Windows Direct3D 2D video options ###
d3dtexmanage 1
d3dfilter 1
d3dfeedback 0
d3dscan 100
d3deffectrotate 1
d3dprescale auto
d3deffect auto
# d3dcustom <NULL> (not set)
# d3dexpert <NULL> (not set)
### Windows sound options ###
audio_latency 1
### Input device options ###
mouse 0
joystick 1
lightgun 0
dual_lightgun 0
offscreen_reload 0
steadykey 0
keyboard_leds 0
a2d_deadzone 0.300000
ctrlr Standard
### Mame CORE video options ###
norotate 0
ror 0
rol 0
autoror 0
autorol 1
flipx 0
flipy 0
debug_resolution auto
gamma 1.000000
brightness 1.000000
pause_brightness 0.650000
### Mame CORE vector game options ###
antialias 1
translucency 1
beam 1.000000
flicker 0.000000
intensity 1.500000
### Mame CORE sound options ###
samplerate 44100
samples 1
resamplefilter 1
sound 1
volume 0
### Mame CORE misc options ###
artwork 1
use_backdrops 1
use_overlays 1
use_bezels 1
artwork_crop 0
artwork_resolution 0
cheat 0
debug 0
# playback <NULL> (not set)
# record <NULL> (not set)
log 0
maxlogsize 10000
oslog 0
skip_disclaimer 1
skip_gameinfo 1
crconly 0
bios 0
### Configuration options ###
readconfig 1
verbose 0