In response to the original problem.
I recently switch a few video cards in and out of my mame system and I ran into this problem on my ATI Radeon 64MB DDR VIVO card. Granted I think the card is hosed, but I did manage to fix that particular problem. I had to completely remove the display drivers (twice, because of other issues) and use the Windows XP default VGA Adapter drivers to get everything sorted out. Once things were working with the bare minimum generic drivers (I use the the TV out option on my card, and that may have had something to do with it) I reinstalled the most recent drivers off the ATI site and my problem with missing half the screen went away.
Now if I could just get rid of the crazy lines that pop up once in awhile (I'll be very sad if this card is hosed).
-niko