I went through the same thing with my 333MHz Lombard. Hooked up a DVD drive, tried to get it to play DVD as a movie and...no dice. Did have some success using VLC under OS X but a frame rate of about 5fps was hardly great and it had a nasty habit of crashing.

To get it to play DVD movies you need, as everyone else has said, the DVD decoder card. Annoyingly the 400MHz model comes with DVD decoder hardware built into the graphics system. Grrrrr

And with 192Mb of RAM, OS 9 will play happily (wouldn't advise OS X though )