I have worked out a way to customize the severity and priority and would like to share and hopefully some comments from the Mantis developers.
Mantis version:
Tried on versions 1.0.3 and 1.1.2
Assumptions:
1. It is assumed to be English language and no consideration of other languages. However, people who need to use it in other languages can apply the same way with another language. I try to avoid the effort in internationalization.

2. I have a quick scan on php files and found no logic directly hard code with severity and priority constants. Therefore, it is assumed that there is no hard coded logic in Mantis depends on the default set of severity and priority.
Customization steps:
1. Create the file "custom_strings_inc.php" in the main "mantis" directory.
<?php
$s_severity_enum_string = '10:tweak,20:minor,30:major,40:crash';
$s_priority_enum_string = '10:low,20:normal,30:high,40:urgent';
?>
2. Rename "config_inc.php" to "custom_config_inc.php" in the main "mantis" directory.
> mv config_inc.php custom_config_inc.php
3. Add the following lines to the end of "custom_config_inc.php".
# Customize severity and default when reporting a new bug
$g_severity_enum_string = '10:tweak,20:minor,30:major,40:crash';
$g_default_bug_severity = 20;
# Customize priority and default when reporting a new bug
$g_priority_enum_string = 10:low,20:normal,30:high,40:urgent';
$g_default_bug_priority = 10;
# Customize icon associative arrays
$g_status_icon_arr = array (
LOW => 'prority_low_1.gif',
NORMAL => 'priority_1.gif',
HIGH => 'priority_2.gif',
URGENT => 'priority_3.gif');
4. Create a new "config_inc.php" in the main "mantis" directory. It should contain the following lines only.
<?php
require_once('custom_config_inc.php');
?>
Notes:
1. The severity and priority are purposely chosen to use a continuous part of the default set. This is to reduce the any potential (unknown) impacts to the system.
2. Customization of configuration file renamed so that all customization are contained in files started "custom_*".
3. Default severity and priority must be set with the associated number instead of constant such as MINOR or NORMAL. This is because constant in PHP5 cannot be redefined.
3. Association of priority and icon were also customized to meet my selected priority.
If the assumptions are not voided, this customization could possibly work with future upgrades.
Regards,
Francis