Yes, there is.
You can use SMS/"Simple Media System", which has it's own dedicated sub-forum right here on PSX-Scene, within the Homebrew DEV&Emu-Scene.
I think, USB is too slow, atleast for VOBs with a high bitrate.
Another thing is, that you can't simply watch a movie from the beginning to the end using SMS, but must start the next VOB, after one has been played.
That is the second-thread you're hijacking!
Stop doing that!
Beside that, the thread-title is (again) not really matching your problem.
PS2 V7/DMS3 V2 (FW:2.4b7); Seagate Baracuda 200GB
PS2 V7/CC1.0 (FW:34 hacked v2 BM:2.1.6); Maxtor DiamondMAX9 PLUS 160GB
PS2 SCPH-30004R; NoMod+NoLaser
3xSony MC 8MB
MAX/Datel 16MB with Boot-CD
Custom FMCB 1.8b+ Beta-Build, my AIO 0.5, Sony&xRhino-Linux