BadMouth, thanks for the suggestion of things to look at. I am using Mala as my Front End. Pretty positive that I don't have any such options checked, but I will verify once I get into my friend's machine again. One thing I did think of is that we are using LEDBlinky. I think in the config there I may have the button numbers screwed up there in the input map. I don't know if LEDBlinky would mess with MAME like that, but I guess it's something I should correct regardless. We are on an older version of MAME. I want to say .128 or something. But I've used this same MAME folder and everything else on a few different computers and never had such an issue. I believe this problem is affecting all games, but I will check again and confirm that fact as well.
Headkaze, it's not a hardware issue. Its a software issue. The mame Default config gets changed every time a game is launched. If I go into the controller config area in Windows, I can hit the buttons and they light up the numbers I'd expect all day. And if we set the default controls in MAME, they appear to set correctly too. The default config right can be set 100% correctly, but when we load a game in MAME and look at it, the numbers are all shifted. The config file never changes, but what appears on the screen is wrong.
It's just screwy I tell you. I have to agree with BadMouth, it really seems like something is changing it "on the fly" because my default.cfg file is right. And MAME just doesnt seem to care.