Type X2 is a windows based arcade system. Most of the latest games use it (KOF13,Blazblue, SSF4AE). The loader allows the user to run the software on a regular pc by bypassing the protection on the arcade software. You can consider the loader to be a crack of sorts.I guess it's fine to post the loader but that isn't exactly legal either because the arcade software itself isn't a consumer product unlike the Wii emulator that allows people to use their own games. An arcade software kit costs operators thousands of USD because of the limited amount of units produced.
You don't need any "legal OS" to run these. These games were dumped from a PROTECTED HD not meant to be used with everyone's PC. It still boils down to needing the pirated games to use this loader. At least you changed the link to something informative.