Onto my select.def, I had my hidden character to work at the first time I costructed the "hidden" code and then after the success, I changed to up. After undo what I did the hidden character never showed up.
I have my recent select by 3 rows by 6 columns:
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;---------------------------------------------------------------------
[Characters]
;How to add characters
;---------------------
;Use the format:
; charname, stagefilename
;
;eg. For a player with filename "kfm",
; and stage filename "stages/mybg.def"
;type (without the semicolon):
; kfm, stages/mybg.def
;
;If you want to load a different def file, you can enter it
;as a directory plus the def file. This example loads up
;chars/kfm/alt-kfm.def:
; kfm/alt-kfm.def, stages/mybg.def
;
;If you put "random" as the stagefilename, then a random stage will
;be selected for that player. eg.
; kfm, random
;
;Zipped characters are also supported.
;Place the ZIP file in the chars/ directory. The syntax is as
;follows:
; zipname.zip:defname.def, stages/mybg.def
;For example, if you have newsuave.def in suave.zip, the syntax is:
; suave.zip:newsuave.def, stages/mybg.def
;If your def file has the same name as the zip file (eg. suave.def
;in suave.zip), you can just put the name of the zip file alone:
; suave.zip, stages/mybg.def
;
;Optional parameters may follow on the same line, separated
;by commas. Each parameter has the form:
; paramname = paramvalue
;where paramname is the name of the parameter type, and
;paramvalue is the value to assign that parameter.
;The optional parameters are:
;
; - music
; Set the paramvalue to the name of the music file to use
; as the BGM for that character. This overrides the bgmusic
; parameter in the stage's .def file, so you can re-use the
; same stage for multiple characters, but have a different
; BGM playing for each person.
;
; - includestage
; Set the paramvalue to 0 to avoid including this stage
; in the stage select list (in VS, training modes, etc)
;
; - order
; Set the paramvalue to the ordering priority to give the
; character. Valid values are from 1 to 10. A smaller value
; means you will fight the character sooner. You will never
; fight an order 2 character before an order 1 character,
; and never an order 3 character before an order 2 one.
; For example, you might want to set your boss character
; to have order=3. The default order value is 1 if you omit
; this param. See *.maxmatches under [Options] for how to
; limit the number of matches per order priority.
;
; Some examples:
; kfm, stages/mybg.def, includestage=0
; kfm, stages/mybg.def, music=sound/song.mp3
; kfm, stages/mybg.def, music=sound/song.mp3, includestage=0
; kfm, stages/mybg.def, order=3
;
;You can also add a randomize icon to the select screen. To do
;this, put the word "randomselect" on a line of its own, with no
;extra parameters.
;
;Insert your characters below.
;Row 1
randomselect
GrayCircle ee, stages/konoha.def, order=3
UzuNaruto, stages/Ichiraku Ramen Shop.def, order=2
Treatment Cacoona, stages/THE Maske Devil stages.def, order=3
SasukeUchihashizui, stages/Uchiha District.def, order=2
blank
blank
blank
blank
blank
blank
blank
;Row 2
sakura94, stages/Mountains.def, order=1
RockLee55, stages/LeeStage.def, order=1
Ahinata, stages/Chunin Exam Stage.def, order=1
insert extra character here ;Saka
insert extra character here ;GoldingCircle
blank
blank
blank
blank
blank
blank
blank
;Row 3
blank
blank
blank
blank
blank
blank
blank
blank
blank
blank
blank
blank
SHKakashi, stages/Kakashi Training.def, order=4
;-----------------------
[ExtraStages]
;Put extra stages here. They will be available in VS and Watch modes.
;For example, you can insert "stages/mybg.def".
stages/konoha.def
stages/Ichiraku Ramen Shop.def
stages/THE Maske Devil stages.def
stages/Uchiha District.def
stages/Mountains.def
stages/LeeStage.def
stages/Chunin Exam Stage.def
stages/Kakashi Training.def
stages/iceplain.def
;---------------------------------------------------------------------
[Options]
;Here you set the maximum number of matches to fight before game ends
;in Arcade Mode. The first number is the number of matches against
;characters with order=1, followed by order=2 and order=3 respectively.
;For example, for 4,3,1 you will fight up to 4 randomly-picked
;characters who have order=1, followed by 3 with order=2 and 1 with
;order=3.
arcade.maxmatches = 3,2,2,1,0,0,0,0,0,0
;Maximum number of matches to fight before game ends in Team Mode.
;Like arcade.maxmatches, but applies to Team Battle.
team.maxmatches = 3,2,2,1,2,0,0,0,0,0
And here is the mugen.txt:
Spoiler, click to toggle visibilty
------------------------------------------
M.U.G.E.N ver 1.00 (2011.01.18) status log
------------------------------------------
Parsing command line...
Command line: J:\Naruto v.s. GrayCircle Mugen\Naruto v.s GrayCircle.exe
Parse command line OK
Initializing...
Allocating game variables
Reading configuration file...OK
Initializing timer...performance timer enabled...frequency 14318180...OK
Initializing keyboard...configuring...OK
Initializing input engine...OK
Initializing sound...Using SDL audio driver: dsound
Requesting mixer parameters (44100, 16, 2, 2048)...
Opened mixer with parameters (44100, 16, 2, 2048)...
OK
Initializing BGM...BGMThreadInit returned 0
OK
Initializing graphics...gameCoord 640x480...render mode 0_0...trying 640x480x16 mode 0x0...success...OK
Setting callbacks...OK
Initializing font...OK
Initializing game variables...OK
Loading system fonts...OK
Loading options...
Initializing pads...failed
Reinitializing input engine...OK
Remapping keys...OK
Reinitializing input engine...OK
Options loaded OK
Loading system...
Load system file system.def...OK
Load system spr...OK
Load system snd...OK
Load system fonts...OK
Load system anim...OK
Load [Title Info]...OK
Load [Option Info]...OK
Load [Select Info]...OK
Load [VS Screen]...OK
Load [Victory Screen]...OK
Load [Demo Mode]...OK
Load [Continue Screen]...OK
Load [Game Over Screen]...OK
Load [Win Screen]...OK
Load [Survival Results Screen]...OK
Load [Default Ending]...OK
Load [End Credits]...OK
Load
Loading fight data
Opening fight data file data/big/../mugen1/fight.def...OK
Reading [Files]...OK
Loading fonts...OK
Load fight anim...OK
Reading [Lifebar]...[Turns Lifebar]...[Simul Lifebar]...[Powerbar]...
[Face]...[Simul Face]...[Turns Face]...
[Name]...[Simul Name]...[Turns Name]...
[Time]...[Combo]...[Round]...[WinIcon]...OK
Allocating explods...OK
Fight data loaded OK
System loaded OK
Initialize OK
Set up graphics...timer...OK
Initializing character info...OK
Initializing select screen...finding characters...
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/insert extra character here/insert extra character here.def
Error reading character file: chars/insert extra character here/insert extra character here.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
Error reading character file: chars/blank/blank.def
OK
Entering main loop
Entering character select.
attempting load and start...no BGM...attempting load and start...no BGM...Loading character chars/RockLee55/RockLee55.def...
Loading info...OK
Loading cmd command set rocklee55.cmd...OK
Loading cns rocklee55.cns...OK
Loading cns powerups.cns...OK
Loading cns specials.cns...OK
Loading cmd state entry rocklee55.cmd...OK
Loading common states common1.cns...OK
Unloading command names...OK
Loading sff rocklee55.sff...OK
Loading anim rocklee55.air...OK
Loading snd rocklee55.snd...attempting load and start...no BGM...OK
Loading pals...(1,1)OK
SFF v1.01 palette hack engaged.
3941 expressions (1362 on trigger lines)
Character RockLee55.def loaded OK
Initializing stage...
Loading BG...attempting load of sound/chibirocklee.mp3...OK
Allocating helpers...OK
Stage initialized OK
hooking mixer callback...
success!
Start of game loop
prebuffering BGM...
End of game loop
Total time: 6.95s
Total frames: 418 Skipped frames: 0
Avg game rate: 60.14
Avg frame rate: 60.14
Entering character select.
attempting load and start...no BGM...attempting load and start...no BGM...Entering character select.
attempting load and start...no BGM...Returned from main loop
Deinitializing...
Frames : 418
Time elapsed: 17.450 sec
ticks: 1745, tps: 100, start 228, end 1973
Clearing player cache...OK
Freeing character info...OK
Freeing select screen...OK
Freeing fight data...OK
Freeing system data...OK
Freeing game variables...OK
Deinitializing input...pad...keyboard...OK
Removing callbacks...OK
Deintializing timer...OK
Deinitializing graphics...OK
Deinitializing BGM...Cleaning up mixer callback...unhooking mixer callback...
Mixer callback was entered 253 times
Mixer callback timing stats (last 253 calls):
75.000000 median, 68.754941 avg, 26.690168 sample std. dev.
Top 10 slowest times: 169 (1), 135 (1), 130 (1), 129 (1), 123 (1), 121 (1), 117 (3), 115 (1), 114 (1), 112 (2)
Top 10 fastest times: 28 (1), 29 (1), 32 (2), 33 (5), 34 (6), 35 (4), 36 (6), 37 (10), 38 (4), 39 (6)
OK
Deinitializing sound...OK
Successful program termination.
Log file successfully closed.
Anything wrong? 
Also there is another game, Sonic Battle mugen, and this mugen has a hidden character and it works fine but its mugen info is this:
Spoiler, click to toggle visibilty
-----------------------------------
M.U.G.E.N ver 2003.06.14 status log
-----------------------------------
Parsing command line...
Command line: C:\Users\POjeranti\Documents\Sonic Battle ME\Mugen.exe
Parse command line OK
Initializing...
Allocating game variables
Reading configuration file...OK
Checking DX version...0x700
Initializing timer...OK
Initializing keyboard...configuring...OK
Initializing input engine...OK
Initializing sound...OK
Initializing graphics...trying 640x480x32 mode 0x4458574E...success...OK
Setting callbacks...OK
Initializing game variables...OK
Loading system fonts...OK
Loading options...
Reinitializing input engine...OK
Remapping keys...OK
Reinitializing input engine...OK
Options loaded OK
Loading system...
Load system file system.def...OK
Load system fonts...OK
Load system anim...OK
Load [Title Info]...OK
Load [Option Info]...OK
Load [Select Info]...OK
Load [VS Screen]...OK
Load [Demo Mode]...OK
Load [Continue Screen]...OK
Load [Game Over Screen]...OK
Load [Win Screen]...OK
Load [Default Ending]...OK
Load [End Credits]...OK
Load TitleBG...VersusBG...SelectBG...OptionBG...OK
Loading fight data
Opening fight data file data/fight.def...OK
Reading [Files]...OK
Loading fonts...OK
Load fight anim...OK
Reading [Lifebar]...[Turns Lifebar]...[Simul Lifebar]...[Powerbar]...
[Face]...[Simul Face]...[Turns Face]...
[Name]...[Simul Name]...[Turns Name]...
[Time]...[Combo]...[Round]...[WinIcon]...OK
Allocating explods...OK
Fight data loaded OK
System loaded OK
Initialize OK
Set up graphics...timer...OK
Playing storyboard logo.def: scene
Storyboard playback finished OK
Finished playing storyboard logo.def: scene
Initializing character info...OK
Initializing select screen...finding characters...OK
Entering main loop.
Playing storyboard intro.def: scene
Storyboard playback canceled by Esc
Finished playing storyboard intro.def: scene
Returned from main loop.
Deinitializing...
Clearing player cache...OK
Freeing character info...OK
Freeing select screen...OK
Freeing fight data...OK
Freeing system data...OK
Freeing game variables...OK
Deinitializing input...pad...keyboard...OK
Removing callbacks...OK
Deintializing timer...OK
Deinitializing graphics...OK
Deinitializing CDA...MP3...sound...OK
Successful program termination.
Log file successfully closed.
Any of the two different?