In recent decades, there has been a great deal of research into the problem of bilingual speech recognition - to develop a recognizer that can handle inter- and intra-sentential language switching between two languages. This paper presents our recent work on the development of a grammar-constrained, Mandarin-English bilingual Speech Recognition System (MESRS) for real world music retrieval. Two of the main difficult issues in handling the bilingual speech recognition systems for real world applications are tackled in this paper. One is to balance the performance and the complexity of the bilingual speech recognition system; the other is to effectively deal with the matrix language accents in embedded language. In order to process the intra-sentential language switching and reduce the amount of data required to robustly estimate statistical models, a compact single set of bilingual acoustic models derived by phone set merging and clustering is developed instead of using two separate monolingual models for each language. In our study, a novel Two-pass phone clustering method based on Confusion Matrix (TCM) is presented and compared with the log-likelihood measure method. Experiments testify that TCM can achieve better performance. Since potential system users' native language is Mandarin which is regarded as a matrix language in our application, their pronunciations of English as the embedded language usually contain Mandarin accents. In order to deal with the matrix language accents in embedded language, different non-native adaptation approaches are investigated. Experiments show that model retraining method outperforms the other common adaptation methods such as Maximum A Posteriori (MAP). With the effective incorporation of approaches on phone clustering and non-native adaptation, the Phrase Error Rate (PER) of MESRS for English utterances was reduced by 24.47% relatively compared to the baseline monolingual English system while the PER on Mandarin utterances was comparable to that of the baseline monolingual Mandarin system. The performance for bilingual utterances achieved 22.37% relative PER reduction.