Well, it seems like you are having problems with a X extension, surely Xv. That later is used for video output (things like colour expansion, scaling and so are then made in hardware, otherwise are "softwarised"). May be your app isn't well configured and don't recognize Xv (btw, witch one are you using?).
Somewhere I read that some versions of Ogle didn't use Xv (I don't know if it's true).
I watch DVD movies on my GF4 w/o any problems using the latest Xine.
Other possibility is you haven't enabled DMA for your DVD/CDROM device, check it. That's very usual (once it happened to me