I also found that I may need to use the chdman command line util to update them. I found that I was supposed to create a folder in the 'Hard Disk Images' called kinst and kinst2, and put the kinst.chd and kinst2.chd files in them.
So, I figured it was time to RTFM, I read through all of the documentation in the documentation folder, have searched this forum, and read on a couple of other web sites. Then the MacMAME window opened and no games were listed. MacMame launched and was unresponsive (swirling beach ball) for about 30 seconds and then brought up a progress bar that said ROMs remaining to load (I think it started at 11), and proceeded to load with a bunch of different file names. When I downloaded MacMAME I dragged the chd file for KI onto the MacMAME icon. I'm not a regular MAME user but attempted to try playing Killer Instinct and Killer Instinct 2.