you can play video cd's using media player itself..
insert the cd, open media player and go to file open, browse go to your cd drive and open the file called AVSEQ01.dat or music01.dat in the mpegav folder.
or if you're using media player 9 open media player and pop in your cd and it should start playing automatically or click on the arrow next to "now playing" and click on your cd drive to start playing the movie
Powerdvd should play vcds happily. Mine does all the time. Actually a cd rom should also play vcds as weel. The fault is probably somewhere else. As said windows media player plays vcd too. Try uninstalling PDVD and reinstalling and give it a go.