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I'm not sure I fully understand your problems so I'll just try to explain my solutions.
I use vlc to play movies. Playing encrypted dvd's requires a special codec that is restricted by patent issues. To get it in Ubuntu, you have to add the medibuntu repositories. But be warned that there are legal issues especially if you live in the USA.
If you're trying to set up a system exclusively for multi-media, the Mythtv Ubuntu package provides a PVR setup. (needs a tv tuner card for best effect.)
Multimedia, and especially dvd, requires a lot of resources to run properly. I've noticed that my movie collection doesn't play well on mplayer, hence the reason I use vlc.
Note that the Ubuntu and Medibuntu repositories should work for any debian distro.
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