I think the system you're putting in there should handle 2 instances at once, for the most part. I haven't actually tried it, but I have noticed that on my 2GHz C2D notebook that MAME running a game like MK3 or so uses about 80% of one core. If you don't plan to run 2 instances of SF4 or something, you should be fine.
Yes, I believe by "each team [having its own] perspective," he meant "different parts of the game," the same game. As is the case in, say, a multiplayer network game.
If you just want a duplicate display of the same game for each team, that would be easily done by simply using nVidia's "clone" option for multiple desktops. Similarly, wouldn't it be simpler to use DualView for two separate instances? I guess I'm a little fuzzy on what mods you're making to the MAME software that couldn't be accomplished with normal video settings.
I'm a programmer and open-source advocate myself, so don't think I'm discouraging the modding! I personally tend to take the easier route with things like this (especially with DirectX and such, which I know almost nothing about). I'm really just interested in exactly what changes you are making, and how they improve on the easier method.