Welcome to the world of DRM - Digital Rights Management - Where huge faceless multinationals with incomes greater then sub-saharan Africa's GDP tell you how you can use the things you have bought legitimately.
My advice - Use a "dumber" OS to watch your dvd's via your computer, say linux or even BeOS at a pinch. Niether of which bother with such BS.
No doubt this problem will crop up more often now that M$ is firmly in bed with the likes of the RIAA and MPAA.
I stare in wonder at the sheer greed of some people. I really do.