I too became an nVidia fanboy when they started trouncing Voodoo. And I hated ATI for their atrocious Rage series which they whored out to compaq and all those other PoS box vendors (who proceeded to gut the already crap Rage chipset). But then along came the GeForce FX, utter pile of crap that it used to be. The 9500 pro (which I have in my old box) was a monster of a card for pretty low price. ATI got their stuff together. Now, nVidia's pulled a head a bit, at least in the mid-range market (where I shop), but they're still fairly even. And now ATI is the underdog since nVidia has become all bloated and whored themselves out to Microsoft. Yay. Plus, ATI is Canadian. How cool is that? (Don't answer.)
On the tech side - I'm guessing it's either corrupted drivers or that wind tunnel comp of yours has finally killed a component. You've got a terrible fan in there somewhere (at least 1) and I could feel the heatwave out of your computer walking across on the other side of the room, so I wouldn't be surprised to hear something melted. I'm hoping that's not the case, but..
If the driver reinstall (both Catalyst and DirectX) doesn't work, then I really don't know. Unless something from Windows is messing it up (which a good reformat and reinstall of critical stuff might fix), I'd guess it's on the hardware end.
As for DVDs - you need a codec to play them. Most DVD drives come with some sort of DVD playing software (WinDVD, PowerDVD, POS Off-brand Software) which includes this codec. Once you install that software, then you can play the DVDs with whatever program you want - they should be smart enough to find the codec. If your drive didn't come with that software, you got screwed.