What is horrible about it? Is it jerky or is it a picture quality problem?
If it is jerky your computer is not fast enough and you will need to either upgrade the CPU or if you have a zoom video PCMCIA port you can get a dvd/mpeg2 hardware decoder from Margi called Dvd To Go. The Pcmcia card also allows you to hook to a tv with composite or s-video and has rca jacks for sound output to your stereo (or whatever).
If picture quality is the issue there is little that can be done. A tv is a much lower quality output and a dvd that looks perfect on a tv might look blocky or grainy on a computer. Some aspects of picture quality are adjustable in software, poke around with some of the settings if picture quality is the issue.
Lastly I have one of those Margi cards and I don't really need it. My system is a 400cel but it runs the pants off any other 400 or 500 systems I have seen. I have no problems playing mpeg4 or dvds full screen but I've not known other systems to be able to do this. I thought I was going to need the Margi card and so did the manufacture as it was included in the dvd upgrade but the thing plays fine with a software player so I don't need the Margi. I don't know if the Margi will work with your OS. See <A HREF="http://www.margi.com/products/dvd/dvdtogo.html" target="_new">http://www.margi.com/products/dvd/dvdtogo.html</A> for more info.
I checked out the 1694 computer at compaq and it is listed as a k6-2 450 but I don't think that matters as it came from the factory with a dvd drive so it shoud be able to play dvds just fine. I'm now thinking that xp is draging down your system somehow. Can you put 98se on it easily?
Remember if you ain't Muslim you ain't Shiite.
The picture quality is great.
The processor in my notebook is a K6-3+ 450 overclocked to 500.
It's usually OK, but when there the video is panning, it gets slightly jerky.
It's better now that I installed PowerTweak.
Also, it did work better on Win 98, but Win XP is so much better for everything else that I just don't want to go back.