I seriously doubt the problem is of my graphics chipset. I have a GeForce 8500GT with 256MB VRAM (DDR2). I don't have issues playing anything else including 720p movies stored on my HDD. Earlier I had a 6600GT 128MB and had no problems playing DVD's with that. Mobo's an Intel 915GAV, had it for the past 5 years.
Ripping DVD's is not an elegant solution for me because I have a fairly big DVD collection and a lot of it is movies I might see every once in a while, so ripping each time is a chore (I don't have the space for keeping them on a long term basis). Accessing extra features like commentaries or docu's will again be a hassle. I just want to put the disc in the tray and play.