Well, just verified that the marquee does still work (in the 1.7.5 beta anyway).
Here's the entries from my mll file
MarqueeImageTop=54
MarqueeImageLeft=187
MarqueeImageHeight=450
MarqueeImageWidth=450
MarqueeVisible=1
MarqueeDefault=DefaultMarquee.jpg
Note that I didn't put a path on the DefaultMarquee.jpg, and I also set mala to NOT use the layout name as folder
My Mala.INI section looks like this
[Layout]
SelectedLayout=No18Arqadium
SwitchWithEmulator=0
SwitchWithGamelist=0
UseLayoutNameAsDir=0
DisableAnimation=0
SearchDefinablesInLayoutPath=0
LayoutDirectory=C:\Games\FrontEnds\Mala\Layouts\No18Arqadium