Okay, to simplify the explanation of MAD as I've implemented it, here goes turn by turn: (BTW, I just now got the AI to target potential enemies, so the AI does it too now

)
H1 (human1) and AI1 are allies, with AI2, AI3, and AI4 allies (2 vs 3). It is peacetime, no wars.
Turn 1: H1 build a nuke, target capital of AI2
Turn 2: nothing
Turn 3: AI2 builds nuke and targets city of AI1
Turn 4: AI4 builds nuke and targets city of H1
etc etc until:
H1 has 5 nukes: 2 targeted to AI2, 1 targeted to AI3, 1 targeted to AI4 (an un targeted nuke as well)
AI1 has 3 nukes: 1 nuke targeted at AI2, AI3, AI4 each
AI2 has 1 nuke: target at AI1
AI3 has 6 nukes: 4 targeted at AI1, 2 targeted at H1
AI4 has 2 nukes: 1 targeted at H1 and AI1 each
War breaks out....... but no nukes are used. Ten turns into the conventional war, things look bad for H1 so he launches his spare nuke at AI4.
Process:
Manual launch - H1 to AI4
Auto launch - AI4 to H1 and AI1 (as both on same team)
Auto launch - H1 to AI2, AI3, AI4; and AI1 to AI2, AI3, AI4
Auto launch - AI2 to AI1; AI3 to H1, AI1; AI4 to H1, AI1
No more nukes to launch.
MAD nukes are launched before the incoming nuke/s impact (early detection systems such as radar or satellite) so no nukes are lost in other nuke explosions. This is how the USA - USSR standoff was. MAD nukes are still vulnerable to anti-nuke things such as SDI.
Dale