Follow the directions below(very simple) and you can play Legend of Xanadu like a straight forward action game.
At the title screen move the cursor to the middle item, press and hold Select, then press and hold Run (hold both through the "File Selection" screen), when the game starts you'll hear a chime (you can then release the keys). Now move to the right of this area, and you'll see a bunch of signs. The bottom 3 rows take you to various parts of the game, the first 3 on the top row are "hints." The second section on the top row (8 signs) do the following:
1: saves the debug file and exits the current game;
2-6: individualt cinemas;
7: lets you play all the action sequences (in order);
8: shows all the cinemas in a continuous loop.
Some cutscene screen shots.
Legend of Xanadu
A good comparison graphic-wise would be Popful Mail for SFC and MCD.
I didn't even think about Popful Mail, that definitely has a very similar graphic style.