Dude, it says 
"[MAMEWAH-PATH]\LAYOUTS\Classic 640x480\layout.lay" etc..
I dont have a layouts folder, all i have is a files folder
That's OK, just create the \layouts folder within your MAMEWAH folder.  By default MW uses an in-built layout so doesn't actually NEED the layout folder, but to use other layouts you MUST have the \layouts folder...
TalkingOctopus:  Actually the layouts folder MUST reside within the MW installation folder. eg if MW is installed to c:\mamewah, you must have the layouts folder at c:\mamewah\layouts.  The config file does not include full path for the layout name - the layout name is actually just a sub-folder of \mamewah\layouts.
Hope that helps 
