Hey Matt,
I'm writing this from memory but I believe there are two "cocktail" options in MAME. One is in the dip switches that makes sure the screen flips for second player. The other is in the "video options" and is really only supposed to be used for horizontal games that you can play head to head in split screen (like joust). This one should be off for all of your games except for the horizontal oriented games that you want to play with a head to head opponent. Hope this helps.