This part of the readme is all you need to know in order to use it really
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Next you will need to convert some NeoGeo roms (mslug.zip for example). You also need a bios rom (neogeo.zip). NeoDS uses the same rom sets as MAME, so make sure your games work in MAME before proceeding. Put all the roms you want to convert along with the bios together in a folder. Copy NeoDSConvert.exe into the same folder. Run NeoDSConvert, and it will convert all the NeoGeo roms in that folder. The converted roms will have the *.neo extension.
My guess is that maybe you have a wrong bios set. do a google search for neogeo.zip