1. What is this about the CPS aspect-corrected variants?Traditional Mugen conversions of classic arcade stages generally use the 320x240 resolution and assume a 4:3 screen aspect, which results in 1:1 square pixels. Then the stage is simply converted from the arcade version in a pixel-for-pixel manner, disregarding any differences in both the pixel shape and the vertical resolution.
The above approach is a trade-off. The main advantage is that it allows for a pixel-perfect display (with no scaling artifacts or blur) in low-to-mid, 4:3 screen resolutions, such as 320x240 or 640x480, which were the PC standard at the time that Mugen was created.
The main disadvantage of this approach is that the actual image of the stage can be severely stretched or squashed, in comparison to the original arcade hardware, which often uses resolutions that are not 4:3, resulting in non-square pixels.
This problem of the lack of aspect-correction and the resulting stretching/squashing of the stage image is especially egregious in the case of the CPS-series arcade hardware (e.g. all of the classic Street Fighter series games, Darkstalkers series etc), as the original arcade screen pixels in this case have a severely non-square aspect of 7:9, i.e. they are tall rectangles.
If the release archive contains the 'cps' variant, then this variant is meant to solve the above problem.
You can see several examples of the aspect-correction in action
in this image.
2. Do non-CPS arcade conversions need aspect-correction too?It depends on the specific hardware.
At least in the case of the Neo Geo arcades (e.g. game series such as Fatal Fury, King of Fighters, The Last Blade, Samurai Showdown etc), the need for aspect-correction is much less pressing, as the pixels of these machines are almost square (off by 5%). However, it would still make sense to convert these stages to the original 224p vertical resolution, if it makes the difference between a working vertical scrolling/deltas and a total lack thereof.
3. What is the disadvantage of aspect-correction?The problem with aspect-correction is that displaying non-square pixels on a low-to-mid resolution PC screen (which has square pixels), will introduce either scaling artifacts, scaling blur or both, depending on the applied scaling method. In other words, the image displayed on the screen will not be pixel-perfect.
This problem is actually not even limited only to aspect-correction, as just using a modern 16:9 wide-screen resolution, already results in non-integer scaling of the old 4:3 PC resolutions (at least in the vertical dimension) so some scaling artifacts will already have been introduced in this case.
Moreover, Mugen 1.1 allows for sub-pixel positioning of sprites and this will also introduce drawing artifacts all by itself.
The above mentioned problems can be mitigated in several ways.
Arcade emulators for example usually have a variety of options that allow to fine-tune the scaling method and the resulting image quality, using different filters and shaders. They usually even allow to apply strict integer scaling, at the cost of displaying a smaller image at the center of the screen. Such options can be used to find a sweet-spot between blurriness and drawing/scaling artifacts. Mugen and Ikemen however currently lack such sophisticated scaling solutions.
Nevertheless, there is also a brute-force approach to reduce scaling artifacts, and it is to go as high as possible with the screen resolution, preferably up to 4K for example.