PowerDVD is a finicky beast. I gave up on it once I started region-freeing my drives and movies. It does not like it when either the DVD or the Drive sends unlocked RPC or multiple RPC codes. I've seen it go from only playing the first VOB file to flat out hanging in the menus in these cases, but everything plays just fine in WinFastDVD. There are also some issues with using hardware acceleration when you are using a Nvidia based graphics card. Sometimes disabling it or locking down a 8X6 or 10X7 resolution can solve issues with the vid card and drivers.
As I said, I've just given up on PowerDVD--even tried updating with a newer XP version I got with my last DVD Reader I bought, and it is still flaky.
You might want to give DirectDVD, WinFast DVD, or WinDVD a shot. You can find some copies out there on the web. I can't give you the links (no warez policy), but they aren't too hard to find if you combine the names when you search.
If it ain't broke don't try to fix it! But, hell if you can tweak that bastard just a little bit more....hehehe.