The encrypted roms are titles that were released late in 1998 starting with Slug X and KoF98. It was SNK's attempt to thwart piracy and conversion of less desirable titles into the latest and greatest (i.e. converting World Heroes into Puzzle Bobble). This employed decryption chips on the PROG and/or CHA boards that would decrypt the data into a usable format on neo hardware. This was to stop bootleggers from simply desoldering the rom, making an eprom copy and slapping it onto donor board from an older, non-encrypted title.
So in order to duplicate a current title, the bootleggers had to do one of two things: reverse engineer the decryption chip in order to use the unmodified roms or decrypt the scrambled data and patch the program rom to bypass the software routines related to decryption. The problem with the second one is careful attention is needed by the crackers to make sure that the game play behavior isn't modified by the changes. When it comes to China specials (boots and multi-carts), they are in the mindset of "works good enough." As long as the game "appears" to play the same, their work is done. If they really cared about making the multis 100%, they would have fixed all the sound glitches and updated the prototype titles like Garou with the final release when they became available.
Now the bigger problem with the multis is that EVERY game needs to be patched and modified in some way to respond to holding start return to the game select menu. You can verify this by running a CRC check and none of them will pass. It takes time and effort to patch an individual title and if this was a trivial process, we'd already have a 999 in 1 cart with every single title in it along with kof hacks to last a lifetime. Throwing in an extra routine to check for another button press could through off a game's counter that depends on a set of instructions executing in a predetermined number of cycles. You can see here that there are a handful of games that exhibit funky behavior due to this.
http://wiki.arcadeotaku.com/w/MVS_Multicart
So what's the problem with patching a rom to run on a multi? Nothing really. But what I see is the main appeal of this product is that people are planning to get it to run games that are not found any multi such as Windjammers, Magician Lord, Matrimelee, Real Bout(s), etc. Otherwise very affordable solutions to play the rest already exist. Now if Darksoft's multicart does not play unmodified roms, his team will need to go through the process of patching every title that exists and/or reuse the pre-patched/potentially buggy code courtesy the existing multi-carts. It is still an enormous effort to patch the 50 or so outstanding titles if they reuse the code from the existing multis. This is the technical answer to why Raz is up in arms about Mitsu's statement about the Darksoft multi playing "original roms." They need to be upfront about what it actually does and needs to be done in order for people to make an informed decision about purchasing. Selling with the promise of future patches to come may be a deal breaker for some as they would prefer to wait until the patches of interest are fully tested and released.