What The Hell is MUGEN?
M.U.G.E.N is a freeware 2D fighting game engine designed by Elecbyte, written in C with the Allegro library.

more fucking info:

So, why play mugen?
Unlimited reasons

A new engine, that you can customize for  you OWN personal fighting game. Fight between   characters of differents games is awesome.

Who doesn't dream with see an match beetween companies?? Capcom,SNK,Sammy,etc