Did you also delete the .cli file in the main directory? The .cli file sets the video mode and controller option. If you delete all files (except for the ROMs) and start over, we can then rule out the emulator as the problem. I honestly don't think it's the emulator as I use it all of the time and I don't think I've ever had an issue with it.
Try updating your video drivers as well. Has other software been installed that may be causing this?