I know there's a bootleg version that allegedly works, but I've never had any luck getting it to run. From memory, it gets to the first screen of the game and freezes.
When I first got into MAME, I had a smiliar problem with Xevious. I ended up downloading an earlier version of MAME and it actually worked. I've tried the same thing with Choplifter, but no luck so far.
While I'm quite fond of the C64, I have to say that the C64 version of Choplifter isn't exactly brilliant. I've been so desperate to play the arcade version of the game, I've even resorted to running FreezeSMS and playing the old Sega version.