It's definitely broken, at least the internal clickable artwork
exactly as Dullaron describes with no external art files at all, clean folder etc.
It's definitely not broken, certainly not the internal clickable artwork. Exactly as hap describes: I was just able to play through 6 rounds with no external artwork, no cfg data or nvram, in both windowed and full-screen mode.
It's definitely broken, but I don't know why
ah...
run with -mouse and it's broken, run without -mouse and it's fine.
*edit*
it's because if you use -mouse the inputs for button1/2 etc. are assigned to the mouse buttons in the input menu, which takes priority over the clickable artwork apparently, so when you press 'mouse button 1' to click on the artwork MAME is instead getting 'button 1' input, which is the wrong colour.
if you want it to work with -mouse then unmap the inputs in the input menu.
although this is neither intuitive nor user friendly