BillyJoelPlaysQuake

I have the CHD for Cliff Hanger and have decompressed it using chdman. The problem is you have to output the CHD to a decompressed file where I am assuming is a group of video and sound files. No the files are NOT a ZIP archive. I have tried Daphne and MAME including following the recommended directory structure. Does MAME read the CHD itself? I know I am on the cusp here with the binaries and the CHD.