Note: For those who do not know what MUGEN is, check this for a basic summary.

This is not an apology for MUGEN.   In fact I will go right ahead and say that currently MUGEN is not user friendly, lacks many features, is quite buggy, is hard to work with, etc.  For a lot of people, it really isn't worth the hassle to put up with MUGEN's many problems.  This limits its appeal to a very limited audience.  This leaves us with the question though, "who is MUGEN for?"  It's obviously not for those who want a perfectly balanced multiplayer game to play against comrades.   It is also not for those who play fighting games in any sort of hyper competitive manner.  Heck, its not even a good starting place for people new to fighting games since they may pick up bad habits from it.

MUGEN is for the people who like to see extremely specific match-ups.  In the same manner that Street Fighter 2 Anniversary Edition could let you pit SF2 Championship edition Ryu against his Super SF2 Turbo counterpart; MUGEN lets you do that on a grander scale that crosses licenses.

MUGEN is also for people who are willing to go to great lengths to see a certain character in a fighting game.  Make no mistake, this is not an easy task.  Creating a quality character for a fighting game never was and never will be an easy task.  But for the people that desperately want a Capcom VS DC or Guilty Gear VS Melty Blood, the tools are there in MUGEN.  

Lastly, MUGEN is for the people who want a single player fighting game.  As far fetched as that may sound at first for many fans of the genre, there are people out there who want more emphasis on the single player experience over multiplayer.  This is where the character imbalances work in MUGEN's favor as you can choose what type of characters to fight as and against.  Maybe Capcom was unto something with Red Earth? 

Again, MUGEN is not a good fighting game for many people.  Heck even MUGEN's own community hates calling it a game, and prefers to call it a game engine.  What gets to me is when people say MUGEN has no soul, ignoring the original content made for it and the time it took to make that content.  Besides, wasn’t the Marvel VS Capcom series tad bit unbalanced but featured the type of dream matched people wanted? ;) 

tl;dr:   MUGEN isn't for everyone, but it has its moments of awesomeness for the people that give it a fair shot

Is that Akuma as the Statue of Liberty?

My enjoyment of MUGEN is limited to the handful of videos I see a year on the youtube. Like anything driven by user content, its utterly broken mechanically and mostly full of copyrighted material.

Discovered MUGEN two years ago while looking up videos on YouTube. Looks like fun but it does seem very complicated to make up characters and people seem to be assholes when they get request for fighters on their roster. Nevertheless, I want to try it out. Whats the best place to start? (I saw the link, but wanted to know if that's the only place to go to download)

Um, I don't remember Fire Emblem ending like THAT. Hell, why Lyn? Why not Eliwood or Hector or Athos? And why something so impersonal as the Dragon? Nergal would've worked well.

I downloaded MUGEN to mess around, but all that shit's confusing. I wish I had the skills to make my own characters.

don't they tune Honda's?

That "MUGEN has no soul" remark is in reference to my recent blog, no? I'm fine if it is, as disagreements are good for the mind, but I thought I'd just state for the record that when I make such grandiose, dramatic, all-encompassing quips, I'm probably not being all that serious, especially not when the original blog in question was also about surreal, incredibly unbalanced match-ups. After playing video games for the better part of 15, 16 years, I'd be stupid to not recognize when mod and fan communities put a lot of effort and creativity into free content and I appreciate and respect that there have been a lot of people who have devoted time and energy to helping make MUGEN what it is.
 
If there was any part of me that was really serious in saying that, it wasn't to do with the fan community at all, but rather the experience that is MUGEN as I personally perceive it. I agree that it is, above all else, an engine and while that in turn leads to some well-made content at its foundation, it also means that when you package and implement together all those disparate pieces of content originally made in isolation from everything else, it makes for an experience that, for me, just doesn't feel cohesive. I get the appeal of appeal of setting up dream matches and whatnot; it's just hard for me to actually enjoy those matches in practice when I always know in the back of my hand that the content used to make those matches probably wasn't tailored for such specific situations to begin with.
 
For me, it's like taking the Unreal Engine and mashing Unreal Tournament 3 and Gears of War together in a theoretical mashup game. They both run on the same tech and they might share some fundamental gameplay mechanics, but unless some very deliberate tweaks are made on both sides to make it feel like a real marriage in gameplay and fun, then the differences between playing the two different sides makes for experiences that are too disparate to reconcile. That's what MUGEN feels like to me and I know that there are a lot of people that can get past that, and that's fine with me, but that's ultimately the biggest barrier I always have to ever actually enjoying it. The balancing and other issues compound it, but are ultimately not as important to me in comparison to just making it all click, which I realize is probably an impossibility to begin with because of what MUGEN is to begin with.
 
As you said, MUGEN's definitely not for everyone and that definitely includes me. I just wanted to clarify that my jabs at MUGEN weren't meant for anyone in particular, let alone people who enjoy it. There's just things that, as you indeed recognize already, that I just don't like about it, so that's where I come from whenever my dislike of it comes up.

I played Mugen back when it was only for DOS. 
 
I thank it for introducing me to fighting games, and now I never bother with it.

The problem I see with mugen is that it is tremendously unbalanced.  Characters are made individually and can be plugged into a person's game, but achieving a balanced roster with no exploits and an even level of quality is pretty much impossible.  Mugen fighters tend to be terribly uneven and have incredibly bad or cheap AI. Because of the imbalance, and the easy availability of pirated capcom or snk MAME roms online with ggpo netplay, its not like people are going to devote themselves to playing a mugen fighter competitively.  The appeal becomes pretty limited.
 
The biggest thing i see mugen used for is to make your own hentai fighting game where you can play as a tentacle monster and rape (literally) Athena, Mai, Kula, etc. You end up with stuff like this (NSFW, but since giantbomb is proud to be one of your primary sources of naked cartoon pussy, i think its okay to post):
 

Things I learned today: Mugen, is apparently for crazy people who want to have copyrighted characters fight other copyrighted characters, regardless of the actual quality of the fighting game experience. That, or as @Supermarius: demonstrated: pornography. 
 
This kind of stuff really doesn't appeal to me. Mugen is good for a laugh when I am looking up stuff on Youtube, but I really don't want to go through the hassle of downloading this user generated content when I know the majority of it is crap, and I would get a better experience out of playing an actual fighting game. That, and my desire for crossovers extends as far as Capcom vs SNK 2.

I remember messing around with it years ago. Got a good laugh out of Tom Hanks' head and the whale from Metal Slug, but didn't play much more.

in summary: MUGEN = porn = fighting with your own penis = fun?

" in summary: MUGEN = porn = fighting with your own penis = fun? "

I had a blast with MUGEN back in the day. Haven't touched it in years, but I'll always look fondly on the more well-done and far out characters I downloaded from various shady repositories and non-English sites. Good times.
 
The thing about MUGEN is it's only as good as the characters you are using. For every really well done, balanced and bug free character there are a dozen sloppy, overpowered, glitchy ones.

it's partially there to solve the many, many vs. topics out there.   such as:
goku vs. ryu
master chief vs. solid snake 
black mage vs. gandalf  
 
makes for some cool youtube videos, for sure, but i'd never actually want to play/build anything Mugen related.