DVD playback is very resource hungry and if you have a lot of applications open whilst you are trying to play your disk that may not be enough capacity for them all to work to the full. With most applications that take place "inside" you machine, Windows, of whatever flavour, quietly shares these resources and you don't notice any slight delays. With DVD playback you can see what is going on and, although Windows is trying its best, you see the slight delays and dropouts unnoticable in other programs.
Try closing as many running programs as you can before playing DVDs and see what happens.
we've updated our windvd to version 4, installed service pack 4 on the w2k os, downloaded adaptec udf drivers, closed all non essential programs, ensured my settings are all using DMA. short of opening the case and switching the configuration i don't know what to do??????