From XBMC Advanced Launcher Wiki Pages
NeoGeo CDZ emulator (binary files) was released as source code only. This emulator only worked with 1:1 images of the original CDs. So far this is the best Neo-Geo CD emulator.
NeoGeo CDZ emulator, is actually only able to start games into CD forms (not roms or CD iso images). It is possible to emulate CD presence using a disk image emulator like Daemon Tools. To use with NeoGeo CDZ the lite version of Daemon Tools is sufficient. With Daemon Tools we will be able to emulate NeoGeo CD presence on your system (mount), then start NeoGeo CDZ. When NeoGeo CDZ will be closed, we will stop to emulate NeoGeo CD presence (umount).
You need first to create an .BAT script like this one :
"C:\Program Files (x86)\DAEMON Tools Lite\DTLite.exe" -mount 0,%1 ncdz.exe "C:\Program Files (x86)\DAEMON Tools Lite\DTLite.exe" -unmount 0
Save this script as freedo-launcher.bat into the same directory than the ncdz.exe application file.
Excepted the .BAT launcher script, no specific NeoGeo CDZ configuration is needed to use with XBMC.
C:\Program Files (x86)\NeoGeo_CDZ_Emulator_V20051225_win\ncdz-launcher.bat