"set player" let you configure each player (emulated pad type, key mapping), it does not change the number of player, so "1" means the settings below are for player1, "2" for player 2, etc
By default, player 1 use the main wiimote. You can change the type of controller by modifying the "Device" option, the port number appears between parenthesis
now, if you want to use a second wiimote, you need to registrate it permanently in your Wii before it can be detected in
any homebrew applications, just read the Wii user manual to know how to do that. Then you change "set player" to 2 and choose "wiimote" in the device type.
if you have only one wiimote but a classic controller, the classic controller and the wiimote can be affected separately to player 1 and player 2 (don't play too far from each other and you are fine lol)
if you are using a gamecube controller, be sure to plug it in the right port (port 1 for player 1, port 2 for player 2)
that's should be all you need to know, notice that everything is explained in the readme, I tried to made it as a nice pdf for a good reason :-/